The business structure you choose influences everything from day-to-day operations to taxes and how much of your personal assets are at risk. You should choose a business structure that gives you the right balance of legal protections and benefits.
According to the IRS, when starting a business, you must decide what form of business entity to establish. Your form of business determines which income tax return form you must file. The most common forms of business are the sole proprietorship (the simplest form), partnership, corporation, and S corporation. A Limited Liability Company (LLC) is a business structure allowed by state statute. Legal and tax considerations enter into selecting a business structure.
