New York is one of the largest business hubs in the United States. If you’re thinking about launching a new venture, you’ll need to choose the type of legal entity it will operate under. Here’s more information about the main types of business formations.
Partnership
Not everyone wants to start a business by themselves. If this is the case, you might consider forming a partnership. When handling business operations under a partnership, make sure you and your partner agree to all business-related terms. You can achieve this goal with a partnership agreement.
Sole proprietorship
If you want your business formed right away, starting a sole proprietorship could be the best option. With this option, you don’t have to worry about completing incorporation documents and waiting for newspaper filings. With that said, this option also doesn’t separate your personal and business finances. People who want to protect their personal finances might want to consider another type of entity.
Limited liability company (LLC)
Many people choose to form a limited liability company. Under this type of legal entity, profits and losses flow through to you and are not taxed at the upper level. However, each member of your LLC will need to determine if they choose to get taxed as a corporation or partnership.
Corporation
Another option to consider when forming a company is to start a corporation. Choosing to become either a C or an S corporation can have tax-related advantages. However, forming a corporation is likely to be the most expensive option on this list.
