fbpx

Business Entities

Which legal structure works best for your business?

business entity question

Do you sell widgets online? Perhaps you develop software, or manage a portfolio of rental properties? Selecting a business entity has long-term ramifications on your success. From legal protection to taxation, the entity you choose will either serve you well or cost you dearly.

We have prepared the chart below to help you understand the key benefits, compliance costs, and risks assigned to each structure.

call us

Do you have questions?

We invite your call to discuss this chart and what may work best for your business.

Contact us today for a no-obligation consultation.

Be sure to leave an email and phone and a preferred time to reach you.

In a hurry? We can help! 512.891.8200

Entity Type

Owners Liability

Taxation

Formation

Corporate Maintenance

Investment

Sole Proprietorship

Fully Liable

On owners personal tax return

Not needed

None

Owner's responsibility

S-Corporation

Owners have limited personal liability for business debts.

Corporate profit or loss is allocated according to ownership share and is reported on each owner's personal tax returns. 

This entity is more expensive to create than a partnership or sole proprietorship.

More formality requirements than for a limited liability company which offers similar advantages.

C-Corporation

Owners have limited personal liability

Double taxation: Owners get taxed as corp + on dividends Fringe benefits can be deducted as business expense.

May have an unlimited number of shareholders. More expensive to create than partnership or sole proprietorship.

Required annual meetings and notes

Shares of stock may be sold to raise capital

Limited Liability Company

Combines a corporation's liability protection and pass-through tax structure of a partnership.

Choose to be taxed as Schedule C-Sole Proprietor, Partnership or S-Corporation.

This entity is more expensive to create than a partnership or sole proprietorship.

Significantly easier to maintain than a corporation.

Same as Partnerships

General Partnership

Owner (partners) personally liable

On owners(partners) personal tax return

Simple, No filing required

Minimal

General partners can raise money

Limited Partnership

Non-participating limited partners have limited personal liability for business debts. However, general partners are held personally liable for any and all business debts.

Choose to be taxed as SchC-Sole Proprietor, Partnership or S-Corporation.

More complex than General Partnership

More than General Partnership

General partners can raise money

Professional Limited Liability Company

Members have no personal liability for malpractice of other members; however, they are liable for their own acts of malpractice.

One owner: Same as propertiership 2+ owners: Same as partnership

Members must all belong to the same profession. Not available in all states.

Same as LLC

Same as Partnerships

Professional Corporation

Individual partners exempted from personal liability for malpractice of the other partners, but not their own.

PCs are granted the taxation benefits of a corporation.

Alternative for professionals in states where a C-Corp is not an option. More expensive to create than a partnership. All owners must be in the same profession.

Formality requirements (e.g., annual reports, minutes, meetings) are required to maintain corporate status.

Non-Profit Corporation

A non-profit corporation is a corporation formed to carry out a charitable, educational, religious, literary, or scientic purpose.

Full tax advantages available only to groups defined as Non-Profit Corporations.  Deduct fringe benefits as business expenses.

Full tax advantages available only to groups organized for charitable, scientific, educational, literary or religious purposes.

Formality requirements (e.g., annual reports, minutes, meetings) required to maintain corporate status. Property transferred to corporation stays there; if corporation ends, property must go to another non-profit.

What our clients say about us

Insogna CPA
4.9
Based on 47 reviews
Insogna CPA, PC
5.0
Based on 20 reviews
I am an equity partner (through a professional corporation) in a major international law firm, with offices in Austin (where I am ) and in 27 other…
Ben W.
Ben W.
Chase and Ami are an absolute pleasure to work with!I was referred to Insogna CPA by a friend and feel very lucky to finally have found a CPA of this…
Jorge G.
Jorge G.
Great service, Chase and his staff are accessible and knowledgable, everything was done online after an introductory meeting, everything was very…
Dip D.
Dip D.
Absolutely love them. They are very Thorough and knowledgeable in their profession. So glad I found them.
Alej S.
Alej S.
This team of CPA’s made my business and personal tax process easier than ever. They are professional, patient and go the extra mile. Even with new the…
Barry S.
Barry S.
These guys have taken being a CPA to a new level – they are streamlined, efficient, responsive and fast. I will be a client for a long time!!
Ryan L.
Ryan L.
Very professional and knowledgeable! Looking forward to being a very long term client!
Doug F.
Doug F.
I first started working with the team for my small business–they were the only accounting firm who explained things to me in a straightforward way. We had…
Maggie J.
Maggie J.
The team at Insogna did a great job with our business and personal tax returns. They identified ways to reduce our taxes by thousands of dollars below what…
Dustin L.
Dustin L.
Ami helped me prepare my taxes for the past few years (including a real estate investment property and capital gains) and I’ve appreciated her patience…
Megan M.
Megan M.
I had the pleasure of working with Chase/Adam/Abby after being referred to them by another CPA who didn’t quite specialize in what I need (already a good…
Bill P.
Bill P.
Chase Insogna and his team of accountants and bookkeepers are on top of it. I have a software technology services as well as a product company and…
Boris P.
Boris P.
Outstanding service, knowledge and support. I would highly recommend this firm to anyone for personal or business tax or financial assistance. A big…
Jerome H.
Jerome H.
Insogna CPA made my experience of creating an LLC fast and easy. I was feeling very intimidated and unsure about the process but was pleasantly surprised at the straightforward process and reasonable price. This will be my first stop for any accounting needs!
Jennifer Brown
Jennifer Brown
We’ve used Insogna CPA for over 7 years and wouldn’t go anywhere else. They are unfailingly professional, thorough and patient. No matter how many questions…
Jodi C.
Jodi C.
I like to do as little as possible when it comes to taxes. Insogna does everything and on time. All we had to do was scan a few documents and answer a reasonable and brief questionnaire. SATISFIED.
Doug Windland
Doug Windland
I’ve been through MANY cpa’s and finally landed on Insogna. There’s never any surprise bills, all expectations and prices are clear and reasonable up…
Dustin B.
Dustin B.
As of 2019, I have used Ingsogna to file my taxes for three years. I keep coming back because it’s easy, affordable and accurate. The electronic document room is a great place to store everything. I have always worked with Ami and she’s always professional and courteous. I used TurboTax for years and that was fine, but as life changed, compensation increased and the tax laws continued to evolve, I found that Ami has saved my family money each year.
Christia Churchill
Christia Churchill
I have worked with the folks at Insogna for almost 4 years and I could not be happier with their services. Very responsive if we have a question and exceptionally friendly. They give me the flexibility to stay focused on my business knowing that are keeping our books in-line.
Kris Byrd
Kris Byrd
I’ve used Insogna CPA’s bookkeeping, tax preparation, and professional services for my business (Bravery Media) and personal finances since 2012. They have always been helpful, quick to respond, and impeccable in their work. As a small business owner, it’s nice to not have to worry about accounting while I’m trying to generate more business. I’ve recommended Chase and his staff to dozens of people since I started working with them.
Joel Goodman
Joel Goodman
I’ve used Insogna CPA’s bookkeeping, tax preparation, and professional services for my business (Bravery Media) and personal finances since 2012. They have…
Joel G.
Joel G.
yH5BAEAAAAALAAAAAABAAEAAAIBRAA7