If you are starting a small business, it is important that you understand different business structures that can help you organize and keep your business entity separate, so you can protect your personal assets. Small and startup businesses may benefit from an LLC rather than a sole-proprietorship or a partnership because an LLC can provide better legal protection with regards to personal liability. Forming an LLC ie. a Limited-Liability-Company, as the name states, will provide you protection with regards to your personal assets (home, personal assets, etc.,). Additionally, an LLC may elect to be an S-Corp with regards to federal tax reporting and filing, in order to benefit from lower personal income taxes and lower or no self-employment taxes (if one is self-employed) depending upon each case and how one chooses to structure, report and file their federal income taxes. For specific issues with regards to tax compliance, reporting, tax filing, please contact a professional tax consultant in your state/jurisdiction after you setup your LLC online but as a startup business it is important that you focus on starting your business because if you don't have any revenues or only have small revenues, you don't need to spend time much on tax issues and tax reporting.
Entity Comparison :Incorporation or LLC? C-Corp or S-Corp? Sole-Proprietorship or Partnership?