The type of business formation you choose for your company can have a big impact on how your business runs and grows.

There are four main types of business formations: sole proprietorship, partnership, limited liability company (LLC), and corporation. Each one has its own advantages and disadvantages.

Sole proprietorships are the most common type of business formation in the United States. They are easy to set up and require very little paperwork. The biggest advantage of a sole proprietorship is that the owner has complete control over the business. The biggest disadvantage is that the owner is personally liable for all debts and losses incurred by the business.

Partnerships are similar to sole proprietorships but involve two or more people. The biggest advantage of a partnership is that it allows the business to raise more capital than a sole proprietorship. The biggest disadvantage is that the partners are personally liable for all debts and losses incurred by the business.

Limited liability companies (LLCs) are a newer type of business formation (most popular amongst new business owners). They have many of the same advantages as sole proprietorships the main advantages is an LLC protects owners from being personally on the hook for business liabilities or debts.

Corporation (C-Corp) is a more complex structure than the other business entity types, but it also has more benefits. For example, a corporation has a separate legal identity from its owners, which protects them from being held personally liable for the debts and obligations of the business. However, there are also some disadvantages to forming a corporation, such as the increased paperwork and compliance requirements.