Business Formation

Most people have heard that forming a corporation provides "limited liability" -- that is, it limits your personal liability for business debts. What you may not know is that there's more to creating and running a corporation than filing a few papers.

Limited Liability Company (LLC)
Limited liability companies combine the best aspects of partnerships and corporations. A limited liability company (LLC) combines the corporation's protection from personal liability for business debts and the pass-through tax structure of a partnership or sole proprietorship.

Non-Profit Corporations - also known as 501(c)(3)
Becoming a nonprofit corporation requires paperwork, but for many groups, the benefits are worth it. Nonprofit (or not-for-profit) corporations work well for all sorts of groups, from artists and musicians to people active in education, health, and community services. In addition to qualifying for public and private grant money, most nonprofit groups seek non-profit corporate status to obtain exemptions from federal and state income taxes.

Sole Proprietorship
If you're going into business on your own, the simplest legal structure is the sole proprietorship. A sole proprietorship is a one-person business that is not registered with the state as a corporation or a limited liability company (LLC).

General & Limited Partnerships
A business with more than one owner that is not incorporated or organized as an LLC is, by default, a partnership. By definition, a partnership is a business with more than one owner that has not filed papers with the state to become a corporation or LLC (limited liability company).