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Selection of the type of business entity is important. The tax effect of a business decision should NOT be the motive for the decision. However, once a business decision is made, then structure the transaction to achieve the most favorable tax treatment.

That principle is never more true then when deciding just what business form you will use in your enterprise. Business form specifically is the underlying structure of your business entity in legal terms. There are several business forms from which to choose and most have unique income tax implications. Your business form will have long lasting and far reaching tax implications. Choose it with care and with as much information as possible from your network of business advisors - CPA, attorney, banker, etc.

The most common business forms are as follows:

• Sole Proprietorships
• Corporations (both "C" and "S")
• Partnerships ("general" and "limited")
• Limited Liability Companies
• Not-for-Profit Corporations

Remember, the form you select will have both legal and tax ramifications, so get plenty of information before making a decision.

For further information, select additional menu items on business entities.

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