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  • Types of Business Entities, Compared

    When you start a business, it’s important that you conduct sufficient research on the various types of business entities, as the tax structures and flexibility of each will ultimately affect your small business’s bottom line. We’ve brought together information on all five main entity types—sole proprietorship, partnership, S corporation, C corporation, and LLC—so that you can make an informed decision and choose the type of business entity that’s best for your specific, unique situation.

    With the following pages, you can learn about each entity type, as well as the differences between various types and benefits to each. We hope the information provided here will give you the tools you need to begin your entrepreneurial journey.

    • Sole Proprietorship
      A sole proprietorship is the simplest type of DBA: this structure is one individual doing business as a name other than his or her own.
    • Partnership
      A partnership is very similar to a sole proprietorship, with the obvious difference that there are more than one individuals involved in the business.
    • S Corporation
      An S corporation is a type of incorporated entity that has significant tax benefits, but a comparatively rigid ownership structure.
    • C Corporation
      A C corporation has a more flexible ownership structure than an S corporation, but it experiences what is known as “double-taxation.
    • LLC
      An LLC, or limited liability company, has options as far as the tax classification it elects with the IRS, making it a flexible option. An LLC is subject to a self-employment tax.
    • DBA vs. Incorporation
      DBAs and corporations are very different entity types structurally; this page contrasts some of the features of a DBA with the features of a corporation so that you can see how they relate to one another.
    • LLC vs. S Corporation
      LLCs and S Corporations are known as some of the more tax-beneficial entity types because they both avoid the double-taxation of a C corporation, but the similarities between the two entity types stop there.
    • LLCs, S Corps, and C Corps
      This comparison chart will help you visualize the features and characteristics that the three main incorporated entity types have in common.

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