When starting or growing a business, one of the most important decisions you’ll make is how to structure it legally. An entity structure, also known as a business structure, determines how your business is taxed, how liability is handled, how profits are distributed, and how your company can grow or bring on investors. It’s not just a legal formality. It directly impacts your taxes, compliance, and long-term planning.

Common entity types

Sole Proprietorship
Simple to set up and operate, but no personal liability protection. Suitable for small-scale, low-risk businesses.

Partnership
Owned by two or more people. Easy to establish, but liability can be shared unless structured as a limited partnership (LP) or limited liability partnership (LLP).

Limited Liability Company (LLC)
Offers liability protection and pass-through taxation. Can elect to be taxed as an S Corp or C Corp. Flexible and popular with small-to-medium businesses.

S Corporation (S Corp)
Ideal for owner-operated businesses. Offers pass-through taxation and potential self-employment tax savings but comes with strict IRS compliance rules.

C Corporation (C Corp)
Best for high-growth businesses or those seeking investment. Subject to double taxation but offers the most flexibility in ownership and fundraising.

What to consider

• Your business goals: Are you building to sell, scale, or keep it small?
• Tax implications: Each structure has different tax outcomes. The right choice can reduce your tax liability.
• Liability protection: LLCs and corporations offer personal asset protection; sole proprietorships and general partnerships do not.
• Compliance requirements: Some structures are more complex and require formalities like annual filings and payroll.
• Long-term plans: Your structure should support future changes, whether that’s growth, sale, or succession planning.

Your structure should evolve as your business does. Many owners start as sole proprietors or LLCs and later switch to an S Corp or C Corp as their needs change.

How we can help

Choosing the right entity isn’t always straightforward. Our team has advised hundreds of business owners on structuring for success – from launch through growth and beyond. We consider your unique goals, tax position, and risk profile before recommending what fits best.

Let’s make sure your entity structure supports the business, and life, you’re building.

Reach out for a personalized consultation.