The number of individuals sharing ownership in an LLC determines whether it is treated like a partnership or as a sole proprietorship. Partnerships cannot have less than 2 owners, and an S Corporation cannot exceed 100 owners, all shareholders must be U.S. citizens and some of the ownership characteristics are limited. A Corporation can have an unlimited number of owners.

Agricultural Co-Op: Three or more persons may form an agricultural cooperative association to engage in the marketing or selling of agricultural products or the goods and services of its members or those purchased from other persons or in connection with any agriculture-related activities. "Agricultural products" are defined as “horticultural, viticultural, forestry, dairy, livestock, poultry, bee and any farm products, in their natural form or process." "Goods and services" means food and beverages, arts and crafts, woodworking and furniture-making, and recycling, composting and repurposing materials.

Broadband Co-Op: Twenty (20) or more persons, either in an individual capacity or as a business, may form a broadband internet services cooperative association to engage in any qualified activity in connection with any internet service; or any activity in connection with the purchase, providing or use by its members of internet services; or in the financing, directly, through the association of any qualified activities.

For-Profit vs. Non-profit. Most businesses are formed with the goal to generate profits. While the aim of for-profit organizations is to maximize profits and forward these profits to the company's owners and shareholders, non-profit organizations aim to provide society's needs (charity, education, religious, literary, or scientific work). Non-profit organizations have no owners. Instead of maximizing profits, they are more concerned with ensuring the revenue is greater than costs. This ensures that the non-profit can still provide society's needs.

Forming a Non-Profit Corporation provides personal asset protection and formalization of your business structure. Entities must qualify under the U.S. Internal Revenue Code Section 501(c). You will need to undertake a separate IRS filing to receive ‘tax exempt' status. If you intend on combining a for-profit business with a public benefit purpose, you may consider a ‘benefit corporation.'

Public benefit corporations and nonprofit organizations formed for a charitable purpose (including religious, educational, scientific, literary, and for sports) may be eligible for tax benefits, including exemption from income tax (both state and local) on income directly related to the public benefit or charitable purpose, exemptions from the sales tax in some instances, and exemptions from real and personal property tax in specific circumstances.

Often when a business is owned by or partially by its employees, an ESOP (employee stock ownership plan) can be set up as a kind of employee benefit plan. Shareholders of an S Corporation must distribute shares equal to the percentage of ownership of each shareholder. An LLC, however, can attribute shares of profit disproportionate to the capital investment of each of its members.

If you are planning on accepting a loan to fund your business, you are at risk of becoming personally liable for the debts of the business, in some cases, if you choose not to formally form an entity. A bank can repossess personal property in lieu of debts accrued by the business.

If you have significant assets to protect, then it makes the most sense to choose an entity type which affords you limited liability. This prevents your personal and family assets from being held against the debts of your business.

Investment properties inherently create liabilities for a business owner. The main benefit of a limited liability company (LLC) is to protect the assets of the owners of the real estate from potential liabilities arising from that property. An LLC also allows you to hold yourself out to the world as an owner of a property that is held by a company. For some owners of investment properties, it makes them feel more reputable to say that they are the manager of an LLC or the owner of an LLC when dealing with their tenants.

If your industry is vulnerable to lawsuits, you want to make sure that your personal assets are protected. You do not want assets to be repossessed by the state, to risk the liability of your partners (even if you fully trust them), or to expose yourself to losing your home, cars, or valuable assets. Creditors may include vendors, employees, banks, etc. Separating your personal assets from those of other partners and from your business is an important first step to take, especially if your business is one that is vulnerable to lawsuits.

West Virginia Code defines the types of business activities that may be registered for the purpose of "professional" practice. Prior written approval from the appropriate state licensing board which governs your profession may be required to register as a professional LLC (PLLC). Check with your state licensing board prior to registration with Secretary of State to determine if prior approval is required. A PLLC is required to carry at all times a minimum of $1 million in professional limited liability insurance.

Unlike sole proprietorships, partnerships, and LLCs, corporations pay income tax on their profits. In some cases, corporate profits are taxed twice — first, when the company makes a profit, and again when dividends, if any, are paid to shareholders on their personal tax returns. However, corporation earnings are only taxed a second time if paid out to shareholders in the form of dividends.

Certain entity types will assist you in minimizing self-employment taxes. Shareholders of S-Corporations do not pay self-employment tax if they are actively engaged as a shareholder-employee of the S-Corporation. Why? Shareholder-employees are paid a salary, with their wages reported on a W-2 and with Social Security and Medicare taxes already withheld. Shareholder-employees will therefore receive two tax documents from the S-Corporation: a W-2 wage statement and a Schedule K-1 statement.

Because of rules and business regulations, only certain types of businesses can offer certain benefits. Benefits are any perks offered to employees in addition to salary. The most common benefits are medical, disability, and life insurance, retirement benefits, paid time off, and fringe benefits. Benefits can be quite valuable especially in the case of medical insurance, which without assistance can cost several hundred dollars a month. That's why it's important to consider benefits as part of your total compensation.

Limited Liability Companies (LLCs) are a popular entity choice for businesses because they receive the same limited liability protection as corporations, but avoid some of the more burdensome record keeping and other corporate formalities that corporations must follow. Although the level of record keeping for an LLC is less onerous than for a corporation, there are still rules you must follow with regard to your LLC in order to maintain the LLC's limited liability status. What documents an LLC must keep varies according to state law. However, at a minimum, it's a good idea for all LLCs to maintain the appropriate records related to the LLC's organization and finances.

Sole proprietorships, general partnerships and unincorporated non-profit associations do not have business name protection. All other entities have name protection.

Limited partnerships (LP) and limited liability partnerships (LLP) have at least one general partner and one or more limited partners. LLP’s generally form for certain types of professions including accountants, architects, attorneys and doctors.

In a limited liability partnership, all the partners may make management decisions for the company. In a limited partnership, the limited partner does not participate in management decisions.

Examples of these types of groups/associations include trade associations, trade unions, learned societies, professional associations, environmental groups, etc. The best entity choice information will be included on your customized report that is generated after steps 3, 4, and 5 are completed. Click next to continue.