Deciding on the legal structure is one of the most important decisions you will make when starting a business. You will probably decide on the legal structure early in the business formation process. However, your choice will have long-term impacts on the amount of taxes you pay, the amount of paperwork your business must complete and the amount of personal liability you may be responsible for.
There are several legal structures to choose from. Four of the most common types of structure include a sole proprietorship, a partnership, a corporation and a limited liability company (LLC).