One of the questions I get asked the most is “which type of entity should I form for my small business?” The answer is always.. “it depends”. There are many reasons to choose to move from a Sole Proprietorship to a Corporation – there are both tax benefits and legal benefits – but you also have to consider your cash flow and your business goals. The administrative and tax filing fees for Corporations and Partnerships are higher than Sole Proprietorships, so you want to make sure you have the cash flow to maintain the business structure.
I am including two resources I’ve found that help break down the benefits of each formation as well as walk you through the steps to make a decision that is right for your business.
The Best Business Entity for Your Small Business
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