New business owners all face the same question: Which business entity should I use to start-up my company? Popular entity forms for start-up include the Limited Liability Company (LLC), Corporation and Sole Proprietorship. Another consideration is whether or not the business activities allow for it to be recognized as a nonprofit tax-exempt organization.

How much personal liability protection does the entity offer? What rules must the business owner follow to remain in compliance? What types of governing documents will need to be created and adhered to? Which local, state and federal taxes will the entity be responsible for submitting? Does becoming a nonprofit mean that you cannot earn profits and/or pay employees?

Different business entities carry very different liability protections, governing structures, and tax consequences. Ultimately, the entity you choose depends on your goals as a business owner.

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Labels: Business Start-up, New business entity