Content: Choosing the right corporate structure is a vital decision that will affect everything from how much you pay in taxes to your personal liability. The five most common structures include sole proprietorship, partnership, limited liability company (LLC), corporation, and S-corporation. Each has unique benefits and drawbacks, depending on the size and nature of your business, as well as your long-term goals. For example, LLCs offer limited liability protection while maintaining a flexible management structure, whereas corporations can issue shares and raise capital more easily.

Entrepreneurs must weigh the legal implications and tax consequences of each structure before making a decision. For instance, corporations are subject to double taxation—once on corporate profits and again on dividends—while LLCs enjoy pass-through taxation. As your business grows, it may also be worth revisiting your corporate structure to ensure that it still aligns with your business needs and goals.