Business Entity Options
This post from A List Apart summarizes well the fundamental considerations involved in determining a structure for operating a business, stating:
"To select the business entity that best suits your need, new entrepreneurs should first consider what is most important to them.
Cost: Cost not only refers to the cost of creating your business entity, but also the cost of maintaining it....Tax Liability: Some business entities will allow you to save money on your income taxes by passing the income directly to the owner... Legal Liability: Some business entities protect their owners from personal liability... Ownership: Different entities have different rules for how many owners it can have...."
The article then compares the advantages and disadvantages of sole proprietorship, general partnership, limited partnership, "C" corporation, "S" Corporation and limited liability company, concluding:
Regardless of the entity you choose, the steps to forming it are essentially the same:
Decide which state you want to form your company in. Some states are more business-friendly than others. You’ll need to either be physically present in the state you choose, or hire a registered agent who is.
Choose a name for your company. You’ll need to pick something that isn’t already taken in the state you have chosen. The attached Excel workbook has links to every state’s Secretary of State website, most of which have online name-search abilities. It’s probably a good idea to also check with the Patent and Trademark Office to make sure that your company name doesn’t infringe on someone else’s trademarked catchphrase.
Follow the instructions for your state to form your company!"
