When you start your business everything is new, exciting, and can be very confusing. One of those confusing issues is how you should form your entity (business). The most common forms are Sole Proprietor, LL, S-Corp, or C-Corp. There are pro’s and con’s to each. I will go through them below.

Please note that I am NOT an attorney. Many new business owners cannot afford an attorney, I know I couldn’t, so if you cannot afford an attorney, just do as much research as you can and try to make the best decision based on your situation. Remember, consulting an attorney is the best advice I could give.

Sole Proprietorship

Advantages

* State file costs are NOT required
* The Administration overhead is normally low
* The Owner normally has full control of the business activities

Disadvantages

* Personal assets are at risk to lawsuits
* The company ceases to exist if the owner quits or dies
* Is subject to self-employment taxes
* Interest is NOT transferrable
* Business CANNOT offset taxes using medical reimbursements and other benefits

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This entry was posted on Wednesday, March 31st, 2010 at 9:16 am and is filed under Business. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.