Choosing a legal structure

Sole proprietor, LLC, S-Corp, C-Corp, co-op, or nonprofit — trade-offs explained.

1. 1

   Sole proprietorship

   Simplest, but no liability protection.

2. 2

   LLC

   Liability protection with flexible taxes. Most common for small businesses.

3. 3

   S-Corp election

   Can reduce self-employment tax once profits are steady.

4. 4

   C-Corp

   Preferred by venture investors; allows multiple share classes.

5. 5

   Co-op / benefit corporation

   Builds community ownership or a legal commitment to social impact.

6. 6

   Register

   File with your Secretary of State, get an EIN from the IRS, and open a business bank account.