Entity Types

• Simple and inexpensive to start
• Owners have sole control of profits
• No double taxation on business income
• Business profits filed on personal tax return
• No annual reports or filings requirements

• Owners have unlimited liability
• Cannot take on business debt
• Can be perceived as unprofessional
• Business life is not ongoing
• Capital is difficult to raise

• Cleaning Services
• Lawn Care Services
• Consulting Services
• Computer Repair Services
• Tutoring Services
• Home-Based Businesses

• Flexibility with how you are taxed
• Can have unlimited number of members
• Members are protected from liabilities
• Low filing costs with little paperwork
• Simple flow-through income taxation

• State franchise or capital values tax
• Cannot pay yourself wages
• State renewal fees
• State publication requirements
• Raising capital may be difficult

• Real Estate Company
• Law Firm
• Accounting Firm
• Investment Firm
• Rental Properties
• Online Businesses

• Executors are in control of the Estate
• Executors make sure things go as planned
• Executors can be compensated for work
• Executors can distribute assets
• Executors can fulfill decedents final wishes

• Being an Executor can be time consuming
• Executors have a fiduciary duty to decedent
• Executors may be liable for breach of duty
• Dealing with beneficiaries can be difficult
• Executors may experience learning curves

• Notifying agencies of death
• Paying creditors
• Paying taxes
• Disposing of real property
• Making court appearances
• Distributing assets

• Possible tax deductions & exemptions
• May be eligible for public & private grants
• Personal liability protection
• May qualify for group discounts
• Can remain in existence indefinitely

• Can take a long time to establish
• Must submit annual filings
• Difficult to find willing volunteers
• Funding can be hard to receive
• Employees may work more for less

• Fraternal Societies
• Home Owners Associations
• Amateur Sports Teams
• Social Welfare Organizations
• Religious Organizations
• Private Foundations

• Avoid probate with judicial authority
• Flexibility at time of death
• Continuity of management if disabled
• Full use of assets while alive
• No delay in investment strategies

• Can be expensive to establish
• May not protect you from creditors
• Possible filing fees can be incurred
• Preferred setup through attorney
• Property registered in name of Trust

• Revocable Trust (Living Trust)
• Irrevocable Trust
• Charitable Trust
• Special Needs Trust
• Guardianship
• Custodianship

• Leverage partner knowledge & expertise
• Shared financial burdens and expenses
• Potential tax benefits and savings
• No double taxation for owners
• Simple tax filings with Form 1065

• Shared liabilities incurred by partners
• Self-employment taxes
• Exit strategies can be complicated
• Potential conflicts with partners
• Raising capital may be difficult

A Partnership is a business made up of two or more individuals that does not require any incorporation paperwork with the federal government. There are three types of partnerships including: General Partnerships, Limited Partnerships, and Limited Liability Partnerships. One of the biggest benefits of a Partnership is pass through taxes.

• Limited liability for owners & founders
• Easy to raise capital with stock options
• Employees can buy stock at a fixed price
• Known as a well established structure
• Owners can sell stock to acquire capital

• More paperwork than other entities
• Must hold formal shareholder meetings
• Corporate tax forms can be difficult
• Little flexibility with lots of regulations
• Possibility of double taxation

A C Corporation is any corporation where profits are taxed separately from owners and is therefore recognized by the federal government as a separate taxpaying entity. A C Corporation features double taxation with one tax at the company level and the other tax on shareholder profit distributions.

• Personal assets are protected
• Benefits of pass-through taxation
• Ownership is easily transferred
• Comes with professional credibility
• Enhanced privacy protection

• Formation can be challenging
• Stock restrictions for shareholders
• Stricter tax obligations with IRS
• Maximum of 100 shareholders
• Limited to one class of stock only

An S Corporation is a type of corporation created through an IRS tax election that opts to pass its income, credits, deductions, and losses through to its shareholders for federal tax purposes. Shareholders of an S Corporation are required to report their income and losses on their personal tax returns, where they will be accessed at an individual income tax rate.