EGTAX

Advantages

Disadvantages

Sole Proprietorship

• Easy To Form
• Easy To Close
• No corporation paperwork needed
• Only needs to file personal return
• Few legal restrictions

• Personally Liable (Your personal assets at risk)
• Can not defer tax from any surplus or profit retention
• Can't bring in new owners or new capital from outside investors
• Business ends upon the death of owner. No continuity.
• All net profits are subject to Self Employment Tax

Partnership

• Ability to utilize multiple business owners.
• Simple to open.
• Establishes team work
• Possible to close with little or no additional taxation.

• Partners distributive income is subject to Self Employment Tax
• A partner is responsible for the another partners actions.
• Profit Sharing
• Disagreements among partners can hinder your business.

LLC

• Steer clear of some S Corporation Restrictions.
• Builds team work
• Avoid the double tax of profits.
• Self-employment tax can be taken on distributions rather than on whole profit.

•  Liability and other aspect may differ depending on state law.
• Profit Sharing
• Need at least two partners in order to establish.
• Disagreements among partners can hinder your business.

C Corporation

• Very easy to transfer or sell the business.
• Company can live on upon owners/shareholder's death.
• You are not personally liable
• Sell company stock to raise revenue.

• You are double taxed on profits.
• You must subject to many federal and state restrictions.
• Upon closure of the business, you may have to pay tax on company gains, and various dissolution fees
• Your corporate charter limits you business activities.

S Corporation

• No personal liability.
• Company can live on upon owners/shareholder's death.
• Raise money by selling stock
• Profits can pass through to the personal return without being subject to self-employment tax.

•  Difficulty when choosing a filing tax year.
• Contributions to pension plans are limited to amount shareholder receives in wages.
• Tax to all shareholders regardless whether they take a distribution.
• There are limits to the number of stockholders, which will limit outside capital.