The StartUp Master Plan

CHAPTER 11

Legalizing Your Business

Of all the decisions you make when starting a business, probably the most important one relating to taxes is the type of legal structure you select for your company.

Not only will this decision have an impact on how much you pay in taxes, but it will affect the amount of paperwork your business is required to do, the personal liability you face, and your ability to raise money. The most common forms of business are sole proprietorship, partnership, corporation, and S corporation. A more recent development to these business forms is the limited liability company (LLC) and the limited liability partnership (LLP). Because each business form comes with different tax consequences, you will want to choose wisely ...