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WHICH TYPE OF BUSINESS ENTITY TO CHOOSE?.
When starting a new business, one of the first decisions to be made is deciding which legal structure your company should take.
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DBA
A DBA (also known as a “sole proprietorship”, “Doing Business As”, or a “Fictitious Name”) is a business that is not separate from its owner, merely a different name that the business owner operates under.
Regular or “C-Corporation”
A corporation is a separate legal entity that can shield the owners from personal liability and company debt. As a separate entity, it can buy real estate, enter into contracts, sue and be sued completely separately from its owners.
S-Corporation
After a corporation has been formed, it may elect “S-Corporation Status” by adopting an appropriate resolution and completing and submitting a form to the Internal Revenue Service (some states require their own version).
Limited Liability Company
A Limited Liability Company can be best described as a hybrid between a corporation and a partnership. It provides easy management and “pass-through” taxation (profits and losses are added to the owner(s) personal tax returns) like a Sole Proprietorship/Partnership, with the liability protection of a Corporation.
Non-profit
A non-profit corporation is a corporation organized under State law for a specific purpose (charitable, religious, educational, scientific, literary, etc.) to benefit a class of people.
Professional Corporation (PC) or Professional LLC (PLLC)
A Professional Corporation (also known as a “PC”) is a special type of corporation authorized by each state specifically for the purpose of providing certain professional services including (this varies by state) doctors, lawyers, and in many cases architects, accountants, psychotherapists, medical services and engineers.
