Establish Your New Business Enterprise With Ease

Business setup costs are often tax-deductible.

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LLC Limited Liability Company

Go along or teaming up? You can turn your LLC into an S or C Corp down the road.

Make sure you're not on the hook for business liabilities with an LLC.

How it's unique

Better for max flexibility in how you manage and run your business; board of directors not required
Unlimited owners (aka "members") allowed Protections & taxation You're not personally on the hook for business liabilities
Taxed once or twice; you're free to choose which can help minimize taxes
Drawbacks to consider
Ongoing filings and fees to stay in compliance
LLCs can't go public
Not recognized globally; you may be taxed as a corporation in other countries

INC Corporation (S or C Corp)

Plan to issue shares, go public, or go global? Go further as a corporation.

How it's unique

Best if you plan to go public one day; can issue shares to founders, employees, and investors
Unlimited owners (aka "shareholders") allowed
Owners may get preferred stock.
Recognized internationally
Preferred by investors
Protections & taxation
You're not personally on the hook for business liabilities
Taxed twice if it's a C corporation—the business pays at the corporate level, and shareholders pay on income received
Avoids double taxation if it's an S corporation
Drawbacks to consider
Ongoing filings and fees to stay in compliance Less management flexibility; must have a board of directors
More administration needs strict rules about holding meetings and keeping records

DBA
Go by a different business name without creating a new company.

How it's unique

Better if you need an easy set-up Not an actual legal entity type Protections & taxation
You're personally on the hook for business liabilities
Taxed just once if your business is classified as a sole proprietorship or partnership—you pay on profits in your personal tax return
Drawbacks to consider No personal liability protection

Sole proprietor

Some challenges you might face as a sole proprietor

Greater liability
As a sole proprietor, you're personally liable if the business gets sued or incurs debts.
Taxes: Sole proprietors must report business profits as personal income and pay self-employment tax.
Difficulties raising capital It's harder to attract investors because you have no partners, shares, or membership interests.

Nonprofit

Why start a nonprofit

Make a difference
As a nonprofit, you can apply for grants, get 501(c)(3) tax-exempt status if eligible, and protect your assets.
Get tax breaks.
You're eligible to apply for state, federal, and other tax exemptions.
Contributions to certain types of nonprofits are tax-deductible
Members and directors are shielded from personal liability for the nonprofit's actions.

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