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Every business owner must choose a legal structure for their business in order to operate, register, and pay taxes. The legal structure you choose should suit the type of services or products you will provide. Consider your options to find the best fit for your business.
Every business owner must choose a legal structure for their business in order to operate, register and pay taxes. There are several different types of legal structures for you to choose from, each with implications for your taxes, personal liability, partnerships and registration requirements. The below is not meant to be an exhaustive list of the different types of legal structures, and is also not meant to serve as legal or tax advice, but can serve as a starting point for your own research. Depending on their needs, many business owners also consult with an attorney.
Some types of legal structures are easier to set up than others. For instance, forming a sole proprietorship does not require you to file any legal documents, while for entities such as corporations, Limited Liability Companies, General Partnerships, Limited Partnerships and Limited Liability Partnerships, you will need to formally incorporate your company with the State of California. You may find more information at the US Small Business Administration website.
For more information, reach out to your local BusinessSource Center for assistance.