Formation types have important similarities and differences. Use this table to identify which one is right for you.
From $0 + state filing fees
Board of directors not required
Unlimited owners (aka “members”) allowed
You’re not personally on the hook for business liabilities
Taxed once or twice; you’re free to choose which can help minimize taxes
Ongoing filings and fees to stay in compliance
LLCs can’t go public
Not recognized globally; you may be taxed as a corporation oustide U.S.
From $0 + state filing fees
Maximum of 100 shareholders
Owners can only get common stock
Save on self employment taxes
You’re not personally on the hook for business liabilities
Taxed once—only shareholders pay on profits received
Ongoing filings and fees to stay in compliance
Less management flexibility; must have a board of directors
More admin; strict rules about holding meetings and keeping records
All shareholders must be U.S. citizens or residents
From $0 + state filing fees
Allows for unlimited owners
Can issue shares to founders, employees, and investors
Owners may get preferred stock
Recognized internationally
Preferred by investors
You’re not personally on the hook for business liabilities
Taxed twice—business pays at the corporate level, while shareholders pay on income received
Ongoing filings and fees to stay in compliance
Less management flexibility; must have a board of directors
More admin; strict rules about holding meetings and keeping records
The simplest and most flexible way to structure your business to protect personal assets.
From $0 + state filing fees
Board of directors not required
Unlimited owners (aka “members”) allowed
You’re not personally on the hook for business liabilities
Taxed once or twice; you’re free to choose which can help minimize taxes
Ongoing filings and fees to stay in compliance
LLCs can’t go public
Not recognized globally; you may be taxed as a corporation oustide U.S.
This tax designation avoids double taxation if you expect your LLC to be profitable.
From $0 + state filing fees
Maximum of 100 shareholders
Owners can only get common stock
Save on self employment taxes
You’re not personally on the hook for business liabilities
Taxed once—only shareholders pay on profits received
Ongoing filings and fees to stay in compliance
Less management flexibility; must have a board of directors
More admin; strict rules about holding meetings and keeping records
All shareholders must be U.S. citizens or residents
A more complex structure that gives you the ability to issue shares, go public, or go global.
From $0 + state filing fees
Allows for unlimited owners
Can issue shares to founders, employees, and investors
Owners may get preferred stock
Recognized internationally
Preferred by investors
You’re not personally on the hook for business liabilities
Taxed twice—business pays at the corporate level, while shareholders pay on income received
Ongoing filings and fees to stay in compliance
Less management flexibility; must have a board of directors
More admin; strict rules about holding meetings and keeping records
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