Business Law Newsletter

Selecting a Business Entity Type

If you are thinking of starting a business, you have many important decisions to make. One of the most important of these is choosing your business entity.

There are a number of different types of business entities, and each has its own set of advantages and disadvantages.

The most common types of business entities are:

• Sole proprietorships
• Partnerships
• “C” corporations
• “S” corporations
• Limited liability companies (LLCs)

In choosing your type of business entity, you must ask yourself the following questions:

• Do you want to maintain total control over your business, or do you want to have partners?
• If you choose to have partners, will they all be treated the same?
• Do you plan on providing your products or services to the local community, or are your products or services going to be marketed nationally or even internationally?
• Do you want people to invest in your business and own a part of it?

You must also consider the legal implications associated with each business entity type.

• Do you wish to have yourself protected from personal liability, or is your business generally one with little or no liability risk?
• Are you planning on employing a large number of people?

The Internal Revenue Service (IRS) treats various business entities differently according to the applicable tax laws. Also, depending on the type of business entity you choose, you may be filing more than one tax return each year.

When starting a business, it is important that you understand the advantages and disadvantages of each type of business entity. You must carefully decide upon the business entity that best suits your objectives.

© 2026 NextClient.com, Inc. All rights reserved.

• Liability for Employee Cellular Phone Use
  In one decade, cellular telephone use has gone from being a novelty for the fortunate few, to being commonplace in our society. Most Americans have a “cell phone” and many use them while driving. In light of the associated dangers,... Read more.
• Overview of Advertising Injury Coverage
  Before 1973, broad form commercial general liability (CGL) policies typically did not contain a provision for “advertising injury.” As defined in the standard CGL policy issued by the Insurance Services Office (ISO), the term... Read more.
• International Commercial Arbitration
  The general strength and momentum of the international marketplace accentuates the need to have clear rules for the resolution of international business disputes. Fortunately, since the challenges that face companies engaged in... Read more.
• The Unrelated Business Income Tax for Nonprofit Organizations
  Nonprofit organizations, e.g., charities, were historically not taxed. In 1950, however, an amendment to the Internal Revenue Code made taxable income earned from activities that did not further the tax-exempt purposes of such... Read more.

• Supreme Court Clears Trump to Resume Third-Country Deportations as Justices Take Up Legal Fight
• Hayden Panettiere’s Ex Seeks Court Authority Over Daughter’s Inheritance, Citing Deleted Emails and Missing Jewelry
• OpenAI Sued After AI Agents Escaped Testing Environment and Hacked Hugging Face
• Trader Joe’s Wins 401(k) Lawsuit Over $37 Million in Forfeited Retirement Funds
• Jermaine Dupri and Jacquees Sued Over ‘Pick It Up,’ Accused of Copying 1992 Song