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I want to open a small business in my home. What type of business entity should I be?

By Scott Springer

Mon, Aug 27th, 2012
Posted in Preston Ask the Expert

The answer to your question is “it depends.” There are essentially three business structures that might work for you: sole proprietorship, LLC, and corporation. There are benefits and disadvantages to each. A sole proprietorship is easy to maintain and requires no state filing, but it provides you no liability protection. A corportation and LLC provide liability protection but require you to file with the Secretary of State and follow some formalities.

There are a lot of factors that play into which of these business structures is right for you, such as the current number of employees and your long and short-term plans for the company. Tax issues also affect your choice of business entity, as can insurance availability

You should talk to a CPA, an insurance agent, AND an attorney to help you decide what type of business structure is going to work best for you. Once you have had all of these conversations, your choice of entity may be much clearer.

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