Business Entity Types

When beginning a business, you must decide what form of business entity to establish. Your form of business determines which income tax return form you have to file. Please click on the following link to determine which tax forms should be used for your business.

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Business – IRS

C Corporation:

  • Independent legal and tax structure from it’s owners
  • No limit to the number of shareholders
  • Taxed on corporate profits and shareholder dividends
  • Must hold annual meetings and record meeting minutes

Partnership:

  • Partners remain personally liable for lawsuits filed against the business
  • Usually no state filing required to form a partnership
  • Owners report their share of profit and loss in the company on their personal tax returns

Sole Proprietorship, DBA – Doing Business As:

  • Owner remains personally liable for lawsuits filed against the business
  • No state filing required to form a sole proprietorship
  • Owner reports business profit and loss on their personal tax return

Limited Liability Company LLC:

  • Independent legal structures separate from their owners
  • Taxed similarly to a sole proprietorship (if one owner) or a partnership (if multiple owners)
  • No limit to the number of owners
  • Not required to hold annual meetings or record minutes
  • Governed by operating agreements

Please reference this link to the Secretary of State. Locate your state on the page, and click on the link. The link will direct you to the appropriate site, and it will  provide you with more insight on how to register your business with your designated state.

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