Incorporated Business Structure Choices

Traditionally there have been four real choices when looking at a protected business entity:

  • Limited Partnership (LP)
  • Limited Liability Company (LLC)
  • C Corporation
  • S Corporation

We call these business structures the safe ones, because they offer protection for their owners. Each of these structures is treated legally as a separate being. To create one you need to file paperwork with the appropriate state agency. Each of these structures requires a separate tax registration with the IRS and state agencies, and is required to file a separate tax return. Owning and operating one of these structures doesn’t make you personally responsible for the debts and obligations of the business, nor does the business take on your personal debts and obligations. This is the key difference between these structures and the risky structures discussed earlier. Things happen. Businesses fail. Economies rise and fall. A protected business structure can be the one thing that stands between you and financial ruin.

There are many variables when you’re structuring a business. That’s why it’s hard to go through a quick-service website. Unless you talk to someone who’s got some knowledge and experience on both the tax and the legal side, it’s hard to know what you don’t know. And that can leave you vulnerable.

Got questions? Contact us! We’re here for you.

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