Business Structure Solutions
Starting a New Business?
Choose the right one for your success.
When it comes to establishing a new business and the success that comes with it, having the right business structure and business model from the start is critical.
There is a difference between a legal business entity and an accounting business entity, and companies that fail to recognize this can face many legal issues down the road. In addition, federal and state laws have different interpretations and requirements, and you need to understand the additional regulations that each state requires.
Corporation
Corporations are formal business entities that provide liability protection to their owners (shareholders). They follow specific tax rules and reporting requirements.
| C Corporation (C-Corp) | The traditional corporate form. The corporation pays income tax, and shareholders are taxed again on dividends (double taxation). | |
| S Corporation (S-Corp) | A special IRS election allows profits and losses to “pass through” to shareholders, avoiding double taxation. Restrictions apply (e.g., no more than 100 shareholders, who generally must be U.S. persons). | |
| Limited Liability Company (LLC) | Technically not a corporation under state law, but often grouped here for simplicity. LLCs offer liability protection like a corporation and allow flexible tax treatment:
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Partnership
Partnerships are flexible business entities where profits, losses, and tax obligations “pass through” directly to the partners.
| General Partnership (GP) | The simplest form, created by agreement between two or more people. All partners share unlimited personal liability. | |
| Limited Partnership (LP) | Includes both General Partners (unlimited liability) and Limited Partners (liability limited to their investment). | |
| Limited Liability Partnership (LLP) | Commonly used by professionals (e.g., law and accounting firms) and provides liability protection for partners. | |
Fair Investment Opportunity for Every Partners in Namerica
