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Types of Business Entities

It's important to choose the right business entity for your company.  Below is an overview to help you decide whether to structure your business as a for-profit corporation, a limited liability company, or a non-profit.

For-profit corporation
  • Intends to make a profit and distribute stock (has shareholders)
  • Governed by a board of directors and/or officers
  • C Corporation - a regular corporation
  • S Corporation - a corporation where income from the corporation is passed through as personal income (no separate tax return is filed)

Limited liability company
  • Blends elements of partnership and corporate structures
  • Owned by and offers liability protection to its members
  • Can be managed by members or managers

Non-profit corporation
  • Profits returned to the organization
  • Serves a public good and takes donations
  • Governed by a board of directors and/or officers'


 

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Laws on this topic may vary from state to state. This content is not meant to provide you with complete information and it is not intended to be legal or tax advice. It is recommended that you consult with your own attorney, accountant or other advisor regarding your specific situation.