Choosing a Small Business Entity-Tax Considerations

Business owners have the following choices for their business entity-

• Sole Proprietor
• Partnership
• C Corporation
• S Corporation
• Limited Partnership
• LLC (Limited Liability Company)

A comparison chart for each of the above can be found here.
Sole Proprietor advantages and disadvantages
Advantages and Disadvantages of Sole Proprietors
Partnership advantages and disadvantages
General Partnerships Advantages and Disadvantages
C Corporation Advantages and Disadvantages
Pros and Cons of a C Corporation
S Corporation advantages and disadvantages
S Corporation Vs. a C Corporation
LLC Corporation advantages and disadvantages
Advantages of an LLC Corporation
Choosing a small business entity is one of the most important decisions to make. There are many factors to take into account, and certain questions must be considered in making a good choice. These questions are-

1. How many owners will the business have?
2. Do you expect losses in the early years?
3. Who will own the business?
4. What assets will be devoted to entity?
5. What are the projected operations?
6. How will the company be financed?
7. How will the profits be distributed?
8. Do you have an exit strategy?

Which Type of Entity Should You Choose
Employer's Tax Guide to Fringe Benefits
Chart of Entity Comparison