Choose the Right Business Structure for Your Goals
LLC, S-Corp, or C-Corp? The right choice depends on your situation. We’ll help you understand the differences and form your business correctly — from $99.
Compare Business Structures at a Glance
Each structure offers different benefits. Here’s how they stack up.
| Feature | LLC | S-Corp | C-Corp |
|---|---|---|---|
| Personal Liability Protection | ✓ Yes | ✓ Yes | ✓ Yes |
| Pass-Through Taxation | ✓ Yes | ✓ Yes | ✗ No* |
| Self-Employment Tax Savings | ✗ Limited | ✓ Yes | N/A |
| Raise Venture Capital | ✗ Difficult | ✗ Limited | ✓ Yes |
| Ownership Flexibility | ✓ Unlimited | ⚠ 100 max | ✓ Unlimited |
| Ease of Management | ✓ Simple | ⚠ Moderate | ✗ Complex |
| Best For | Most small businesses | Profitable businesses | Startups raising funds |
*C-Corps face “double taxation” — corporate profits are taxed, then dividends are taxed again as personal income.
Which Business Structure Is Right for You?
Answer these questions to get a personalized recommendation.
🏠 Solo Founder / Side Business
I’m starting a business on my own or with a partner. I want simplicity and protection.
💰 Profitable Business Owner
I’m earning $50K+ profit and want to reduce self-employment taxes legally.
🚀 Startup Seeking Investment
I plan to raise venture capital, issue stock options, or potentially go public.
🤔 Still Not Sure
I’d like to talk to someone who can help me understand my options.
LLC (Limited Liability Company)
The LLC is the most popular business structure in America — and for good reason. It combines the liability protection of a corporation with the simplicity and tax flexibility of a sole proprietorship.
80% of new businesses choose LLC because it’s easy to set up, simple to maintain, and protects your personal assets from business debts and lawsuits.
✓ Pros
- Personal asset protection
- Pass-through taxation
- Flexible management
- Minimal paperwork
- No ownership limits
✗ Cons
- Self-employment taxes
- Harder to raise VC funding
- Varies by state
LLC Is Best For:
- 💻Freelancers & Consultants
Designers, developers, writers, coaches - 🏪Small Business Owners
Retail, restaurants, service businesses - 🏠Real Estate Investors
Rental properties, house flipping - 🛒E-commerce Sellers
Amazon, Shopify, dropshipping - 🎯Side Hustlers
Part-time businesses, passion projects
S-Corp Tax Savings Example
Business profit: $100,000/year
*Simplified example. Actual savings depend on your situation. Consult a CPA for personalized advice.
S-Corporation Election
An S-Corp isn’t a separate entity type — it’s a tax election. You form an LLC or C-Corp first, then elect S-Corp status with the IRS using Form 2553.
The benefit? You can potentially save thousands on self-employment taxes by paying yourself a reasonable salary and taking additional profits as distributions (which aren’t subject to self-employment tax).
✓ Pros
- Save on self-employment tax
- Pass-through taxation
- Personal asset protection
- Credibility with clients
✗ Cons
- Must pay reasonable salary
- More paperwork (payroll)
- 100 shareholder limit
- One class of stock only
When Does S-Corp Make Sense?
Profit Threshold
Generally makes sense when profits exceed $40,000-50,000/year
Consistent Income
Works best with predictable, steady revenue to set a reasonable salary
Worth the Complexity
Tax savings must outweigh additional payroll and accounting costs
C-Corporation
The C-Corp is the standard structure for companies planning to raise significant investment, go public, or scale rapidly. It’s what VCs expect and what makes issuing stock options possible.
Yes, there’s “double taxation” — but for startups reinvesting profits into growth (not distributing dividends), this often isn’t an issue in practice.
✓ Pros
- Attract VC investment
- Issue stock options
- Unlimited shareholders
- Multiple stock classes
- Go public (IPO) potential
✗ Cons
- Double taxation
- More formalities
- Complex governance
- Higher accounting costs
C-Corp Is Best For:
- 🚀VC-Backed Startups
Raising angel or venture capital - 👥Companies with Employees
Planning to offer equity compensation - 🌍International Founders
Non-US residents starting US companies - 📈Exit-Focused Businesses
Building to sell or go public
Delaware C-Corp is the gold standard for startups seeking VC funding — it’s what investors expect.
Detailed Comparison Guides
Still weighing your options? Dive deeper with our comprehensive guides.
Which State Should You Form In?
You’ve heard about Delaware and Wyoming — but do you actually need them?
Your Home State
Best for most businesses. If you operate primarily in one state, form there. Forming elsewhere means registering in both states — double the fees, double the filings.
Choose your home state if: You’re a local business, service provider, or don’t plan to operate in multiple states.
Delaware
The gold standard for C-Corps raising investment. Business-friendly laws, specialized courts, and what VCs expect. Less relevant for LLCs.
Choose Delaware if: You’re forming a C-Corp to raise venture capital or planning an IPO.
Wyoming
Privacy-focused, low fees. No state income tax, strong asset protection, and doesn’t require public disclosure of members.
Choose Wyoming if: Privacy is paramount and you operate online without a physical location requirement.
Not sure? Talk to us — we’ll help you choose the right state for your situation.
Frequently Asked Questions
Common questions about business formation.
Can I change my business structure later?
Yes, but it’s easier to choose the right structure upfront. Converting an LLC to a Corporation (or vice versa) involves additional filings and potential tax implications. However, electing S-Corp status is relatively straightforward if you start as an LLC.
What’s the difference between LLC and sole proprietorship?
A sole proprietorship offers no liability protection — your personal assets (home, savings, car) are at risk if your business is sued. An LLC creates a legal separation between you and your business, protecting personal assets from business debts and lawsuits.
Do I need a lawyer to form a business?
For most standard formations, no. Our platform provides attorney-reviewed documents and handles the filing process. However, if you have complex ownership structures, are raising significant investment, or have unusual circumstances, consulting an attorney is recommended.
How long does formation take?
Your part takes about 10 minutes. State processing varies: some states approve same-day, others take 1-2 weeks. Our Complete package includes expedited filing, which reduces processing time to 1-3 business days in most states.
What’s included in the $99 price?
Everything you need to start operating: Articles of Organization/Incorporation filed with your state, Federal EIN from the IRS, customized Operating Agreement, banking resolutions, and lifetime customer support. State filing fees are additional and vary by state.
Can non-US residents form a US business?
Yes! Non-US residents can form LLCs and C-Corps in most states. You’ll need a US mailing address (our Registered Agent service can provide this) and may have additional tax considerations. C-Corps are often preferred for international founders.
Simple, Transparent Pricing
Same price for LLC, S-Corp election, or C-Corp. No surprises.
Economy
Everything you need to start
- ✓ Formation documents filed
- ✓ Federal EIN included
- ✓ Operating Agreement / Bylaws
- ✓ Banking resolutions
- ✓ Lifetime support
Complete
Full service for busy founders
- ✓ Everything in Economy, plus:
- ✓ 1 Year Registered Agent
- ✓ Expedited filing (1-3 days)
- ✓ Compliance calendar
- ✓ Priority support
Ready to Form Your Business?
50,000+ entrepreneurs have trusted TrustedLegal to launch their businesses. LLC, S-Corp, or C-Corp — we make formation simple, fast, and affordable.
EIN + Operating Agreement included • 10-minute signup • All 50 states
