Legal Organizational Structure

Depending on your business type and situation, you will need to decide which legal structure best fits your business. SBA site lists all type of business structures, and has gives the advantages and disadvantages of each type.

 

Be sure to visit the links provided to learn all the specifics of each business structure:

 

• SBA Choose A Structure
• Business Structures
• Wikipedia - Business Structures

 

The various structures are:

  

• Sole Proprietorship
     You are responsible for all company liabilities.
     1 owner, you can operate with your Social Security Number as your tax ID #

 

• Partnership
     Partners are responsible for all company liabilities.
     2 or more owners, you have to obtain a federal tax id number

 

• Corporation
     The shareholders are not responsible for corporate liabilities.

1. C-Corp: Corporation pays taxes, and is taxed again on dividends paid to shareholders

2. S-Corp: Corporation pays no taxes. The profit or loss of the corporation goes directly to the owner(s) tax return, split up by % of  

                 ownership.

 

• Limited Liability Company
     New business structure that is hybrid, designed to provide limited liability feature of a corporation and the taxing flexibility of partnership.