Sole Proprietorship
Pros
- Easiest, no formation paperwork
- Pass-through taxation
Cons
- No liability protection
- Personal assets at risk
Business Formation Center
Form your business with confidence
Compare entity types, understand ongoing compliance, and track licenses, permits, and annual filings.
Choose an entity
LLC
Pros
- Limited liability
- Flexible taxation (default pass-through, can elect S-Corp/C-Corp)
- Less formal than a corporation
Cons
- State filing fees + annual reports
- Self-employment tax on default treatment
S-Corporation
Pros
- Pass-through taxation
- Distributions not subject to SE tax
- Limited liability
Cons
- Ownership restrictions (≤100 US-citizen shareholders)
- Reasonable-compensation requirement
- Payroll setup
C-Corporation
Pros
- Unlimited shareholders, stock classes
- Best for VC funding & employee stock
- Limited liability
Cons
- Double taxation (entity + dividends)
- More formality (board, bylaws, minutes)
Compliance basics
- Federal EIN from the IRS (free at irs.gov)
- State registration with the Secretary of State + registered agent
- Annual report / franchise tax (varies by state)
- State and local business licenses (city, county, professional)
- Sales tax permit if selling taxable goods or services
- Payroll registration if you have employees or take S-Corp wages
- BOI (Beneficial Ownership Information) reporting — check current FinCEN requirements
Track your deadlines
Annual reports, license renewals, and tax filings all have hard dates. Add them to your deadline tracker and get reminded 14, 7, 3, and 1 day before.
Open deadline trackerGenerate a formation checklist
Ask myjusticeAI to generate a state-specific checklist (e.g., "How do I start an LLC in Illinois?").
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