Are you beginning a startup in Austin? If you’re seeking a business consulting service in Austin locally, it can be helpful to know the basics of what the consultants are talking about before you go in. Here are the types of corporate structures to get you started
1. Sole Proprietorship
This is definitely the easiest to start, and because of that, the most common. This is especially true for new small business owners. However, while this is your cheapest and quickest option, business consulting services usually warn of this downside: there is no scaling option (you can’t add additional owners) and no personal liability protection.
There are two types of partnerships: general and limited. Having a Limited Liability Partnership (LLP) protects you from liability in this case. However, closely managed small businesses can also use general partnerships.
3. Limited Liability Companies (LLC)
Limited Liability Companies are growing in popularity. This is likely due to the fact that a sole owner can get protection from liability. Business consulting services may recommend this at times as it allows you to be more flexible with taxes.
4. S Corp
An S corp is similar to a C corp, but is marked by the different way a business has chosen to be taxed under the code. Basically, the business itself isn’t taxed. Instead, the income is reported on the owners’ personal tax returns.
5. C Corp
The C corp is the default type of corporation. It differs from S corp because the business itself is taxed. This is more ideal for capital, shareholders, and things you generally think of when you think of your average corporation. While S Corp can have some benefits, sometimes a business consulting service will just recommend the good old fashioned C Corp.
Hollister Legal offers corporate and transactional, tax planning and consulting, immigration and visas, and business and startup services.