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Limited Liability Company (LLC)

The most popular type of business entity.

3 reasons for creating an LLC:

  1. Protect your assets: An LLC can help keep your personal finances separate, so your personal assets stay protected from any business debt or lawsuits.
  2. Make things easier: LLCs typically come with fewer LLC maintenance rules, and there are simplified standards for record keeping.
  3. Tax flexibility: You can choose to have your business treated as a corporation or a partnership, which may save you money and reduce the tax burden.
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Not sure what to choose?

Other types of businesses and their benefits

Capable of going public and issuing stock.

Best for businesses with a board of directors and shareholders.

Form my Corp

Help others while protecting your assets as a 501(c)(3).

Get your organization the benefit of eligibility to apply for grants.

Form my nonprofit

DBAs make up 80% of all sole proprietorships.

Reduce your liability, protect your personal information and more.

Form my DBA

Compare your options

Which business structure is right for you?

Structure Liability Protection Taxation Best For
LLC Personal assets generally protected from business debts Pass-through by default; can elect corporate taxation Most small businesses wanting liability protection with simple maintenance
Corporation (C-Corp) Strong liability protection Taxed at the corporate level, then again on dividends ("double taxation") Businesses planning to raise outside investment or eventually go public
Nonprofit (501(c)(3)) Liability protection for directors/officers Tax-exempt once approved by the IRS Charitable, religious, or educational organizations
Sole Proprietorship / DBA No separation — personal assets are exposed Reported directly on your personal tax return Solo freelancers testing a low-risk business idea
Partnership Varies — general partners typically have no liability shield Pass-through to each partner's personal return Two or more owners sharing management and profits

This comparison is a general starting point, not tax or legal advice. State rules and tax treatment vary — confirm specifics with an accountant or business law attorney before filing.

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Frequently asked questions

How does forming a business differ between states?

How does forming a corporation differ by state?

Corporation formation varies by state in filing fees, required documents (such as articles of incorporation), and ongoing compliance rules. Some states are popular for incorporation due to favorable business laws.

How does forming a nonprofit differ by state?

Nonprofit formation requires state-level registration plus federal 501(c)(3) application. State rules differ on charitable registration, board requirements, and annual reporting obligations.

How does forming a DBA differ by state?

DBA (Doing Business As) registration is handled at the county or state level depending on where you operate. Filing fees, renewal periods, and publication requirements vary widely by jurisdiction.

Do I need a lawyer to start a business?

Not always. Simple formations like a single-member LLC or DBA can often be filed on your own or with a formation service. A lawyer is worth consulting if you have business partners, outside investors, complex licensing requirements, or need custom operating agreements.