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Register your LLC, Corporation or Nonprofit for free

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Choose a business structure

llC

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C-CORP

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S-corp

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Nonprofit

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Sole proprietorship

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Compare the advantages and disadvantages of each entity type to find the one that’s best for your business.

Choose a business structure

Compare the advantages and disadvantages of each entity type to find the one that’s best for your business.

LLC

S-corp

C-corp

Nonprofit

Sole proprietorship

Managing your business

Limited liability

Incorporation can protect business owners and shareholders from personal financial responsibility for business debts or liability.
Members are protected
Shareholders are protected
Shareholders are protected
Directors are protected
          — 
Sole proprietors are not protected

Favorable for financing


Depending on your goals, certain entity types may be more suitable.

Gains credibility when applying for loans and grants

Can distribute one class of stock to up to 100 people
Can issue multiple classes of stock to unlimited shareholders
Gains credibility when applying for loans and grants
          —
Often more difficult to get loans and cannot issue stock

Maintenance

Compliance requirements vary by state and entity type
Easy to maintain and often most affordable
          —
 Payroll requirements may create operational overhead
         —
Requires more complex accounting and potentially more reporting and fees
             —
Typically the most demanding due to tax-exempt status
No requirements or fees

Management flexibility


Some entities are more rigid than others when it comes to structure.
Variety of management structures
—Defined by state and federal law
—Defined by state and federal law
—Strict management laws
No management structure

Unlimited lifetime


Succession planning may be important to you. If so, you'll need a business structure that enables a smooth transition.
With the proper planning, LLCs can exist for generations
Existence is not tied to specific shareholders
Existence is not tied to specific shareholders
Existence is not tied to specific directors
            —
No longer exists when the owner quits or passes away

Tax considerations

Tax treatment


Your choice of entity can impact your tax rate and filing options.
Pass-through taxes: Most often, LLC members are taxed on their personal tax returns
Pass-through taxes: S-corp shareholders are taxed on their personal tax returns
            —
Double taxation: C-corp income is taxed at the corporate level first, then again at the personal level
Nonprofits can apply for tax-exempt status and donations are tax-deductible
Sole proprietorships are taxed only on their owner's tax return.

Registration fees


State filing fees are required for all legal entities. As a Rocket Lawyer member, you only pay state fees.
Fees are tax-deductible
Fees are tax-deductible
            —
Fees are tax-deductible
Fees are tax-deductible

No fees

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Questions? We’re here to help

Our business specialists have helped incorporate thousands of businesses like yours. We’ll walk you through the entire process step by step and answer any questions you might have.