There are lots of super sexy reasons to become an entrepreneur -- the independence, the possibility of financial success, the thrill of bringing an innovative idea to life. But don’t be fooled. There are a lot of complicated, tedious and mundane aspects to being an entrepreneur, too.
Like doing your taxes. And your expenses. And -- perhaps the most dreaded -- determining how you will legally structure your business.
Deciding whether to register as an S Corp, a C Corp, an LLC, sole proprietorship or a partnership can be tricky. Each has unique benefits and costs that have serious implications for your bottom line.
For example, if you decide to establish your business as a sole proprietorship, the tax burden will be the lowest, but you will be held personally liable if your business goes into debt or can’t pay back a business loan. If you decide to structure your business as a C Corp, you will face burdensome and complex legal requirements, but the personal assets of you and your shareholders are protected from business losses.
The infographic embedded below, generated by the University of Southern California online Master of Laws program, neatly breaks down each legal structure in terms of its costs and complexity and advantages.
Check it out.