Corporate Forms

Choosing the Company Form

When you decide to start a business in America, you should ask yourself what kind of legal form it should have.

The type of your business should be chosen according to your needs.

When you create your business, you have two types of company forms that you can choose from.

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Both types of companies have their advantages and disadvantages depending on sales, finances and the number of owners. ​

The questions to ask are: what kind of business do I manage? How many owners are we? What is my financial situation?

There is no single option suitable for all businesses: entrepreneurs must choose the structure that best suits their needs. ​ Here we compare the most common types of company forms that can be used.

Company forms:

Limited Liability Company​



Although paperwork takes a lot of effort to set up this type of company, this is a very common type of company form. ​

By setting up a corporation you protect your personal assets as you create a separate entity from yourself. ​

This makes accounting a little more complicated to do, but you pay taxes based on your decisions made in the company, which could mean that Uncle Sam is given less money while you use more to help your business to grow.

Limited Liability Company

Limited Liability Companies (LLCs) are a very popular type of company form because they offer owners various opportunities.

In general, owners can opt for the corporate tax model, where the corporation’s income is taxed, or the transfer model of a partnership or property, where personal income includes business gains and losses and is taxed accordingly.

Some states haven’t changed their tax legislation to bring it into line with the decisions of the IRS. Because of this, it’s advisable to contact a professional expert in the laws of the state in which you’re opening the business.

Regardless of the tax model you choose, your personal assets are protected in the event of bankruptcy. When choosing the type of company form, the future needs that may arise must be taken into consideration.

As mentioned earlier, there are advantages and disadvantages for each type of company, but if you evaluate the characteristics of the two options well, everything will be clearer.

Before making a decision, it’s advisable to consult an expert to clear any doubts about what to do and how to do it.