SOLE PROPRIETORSHIP – This is the simplest business structure to implement but also offers no personal liability protection. So if your business is sued, your personal assets also may be in jeopardy. Filing requirements are minimal, and you simply report your business's earnings on your personal taxes. No other state or federal business filings are required.
LIMITED LIABILITY COMPANY (LLC) – An LLC offers increased protection of your personal assets by establishing your business as a separate legal entity. While the liability protection isn't foolproof, it does offer more protection than a sole proprietorship. You may need to comply with additional filing requirements and will need to pay both incorporation and ongoing fees.
C CORPORATION – Most major corporations are set up as C corporations which, when done properly, offer the most liability protection. They are likely to be more expensive to incorporate and are subject to double taxation, as income doesn't pass directly to the shareholders.
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