Ideal for solo business owners who want liability protection without the complexity of a corporation. This structure legally separates personal and business finances while keeping things simple from a tax standpoint. By default, it's taxed like a sole proprietorship, meaning all business income and expenses flow directly to personal tax returns.

This is a great option for freelancers or consultants.

Designed for businesses with two or more owners. It offers the same liability protection as a Single-Member LLC, but the ownership is shared among the members. By default, the IRS treats it as a partnership, and profits are divided and reported on each member’s tax return. An operating agreement is in place to outline how the business will be managed and how decisions are made.

An LLC can choose to be taxed as an S-Corporation. Under this structure, the owner must pay themselves a salary through payroll, which is subject to employment taxes and other applicable deductions. This structure still offers the liability protection of an LLC and keeps the pass-through taxation model, but requires more administrative effort, including payroll processing and additional tax filings.

C-Corporations are subject to double taxation as profits are taxed at the corporate level and again when distributed to shareholders as dividends. This structure can offer more options for growth and investment and can be a good fit for startups planning to scale rapidly or raise venture capital.