Business Entity 101 (Basic of US Entities That Every Business Owner Must Know)
Here you can learn about the basics for various business entity types in the US.
Sole Proprietorship
Pros:
You work solo under your name or your business name (DBA), one level of taxation.
Cons:
No liability protection.
General Partnership
Pros:
One level of taxation (no tax at partnership level, every partner receives a K-1 which must be reported on his personal tax return).
Cons:
Every partner is liable for the partnership’s liabilities (no liability protection).
Limited Partnership
Similar to General partnership, except that limited partners have liability protection against the partnership’s liabilities (not the General partner).
LLC: Some people call it the best of corporation and partnership
Pros:
Provides liability protection for its members and has only one level of taxation (at partner’s level).
Cons:
Cannot raise public funds (aka, cannot go public).
S-Corporation
Similar to LLC in that it provides liability protection for the shareholders and has one level of taxation.
Pros:
It can help you save in social security taxes (to some extent).
Cons:
Can have only 100 shareholders. Each shareholder and their spouse must be a US person. Cannot have a partnership (or LLC) as a shareholder. Cannot go public.
C-Corporation
Pros:
Provides highest level of liability protection. Can have as many shareholders as it wants. Can go Public.
Cons:
Two levels of taxation (taxed both at corporation level and shareholder level).
To determine which entity suits you best, please contact us.
Sole Proprietorship
Pros:
You work solo under your name or your business name (DBA), one level of taxation.
Cons:
No liability protection.
General Partnership
Pros:
One level of taxation (no tax at partnership level, every partner receives a K-1 which must be reported on his personal tax return).
Cons:
Every partner is liable for the partnership’s liabilities (no liability protection).
Limited Partnership
Similar to General partnership, except that limited partners have liability protection against the partnership’s liabilities (not the General partner).
LLC: Some people call it the best of corporation and partnership
Pros:
Provides liability protection for its members and has only one level of taxation (at partner’s level).
Cons:
Cannot raise public funds (aka, cannot go public).
S-Corporation
Similar to LLC in that it provides liability protection for the shareholders and has one level of taxation.
Pros:
It can help you save in social security taxes (to some extent).
Cons:
Can have only 100 shareholders. Each shareholder and their spouse must be a US person. Cannot have a partnership (or LLC) as a shareholder. Cannot go public.
C-Corporation
Pros:
Provides highest level of liability protection. Can have as many shareholders as it wants. Can go Public.
Cons:
Two levels of taxation (taxed both at corporation level and shareholder level).
To determine which entity suits you best, please contact us.
Contact US
Email: Info@Qtaxservices.com
Phone: (424) 888-3878
Phone: (424) 888-3878