Bookkeeping and Accounting Setup
Assess whether your new business has a bookkeeping system, chart of accounts, and process to keep clean records from the start.
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For founders, new owners, and anyone starting out
Choosing a Legal Structure
Weigh sole proprietorship, partnership, LLC, S-corporation, and C-corporation against your liability, ownership, tax, and funding needs, and what to confirm with an attorney and CPA.
6 guided steps
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Official guidance links
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Your free guided checker
Answer a few quick questions below. It is private - nothing is submitted or stored - and takes about a minute.
Informational business-formation diagnostic only; not legal, tax, accounting, or investment advice. Confirm entity, tax, and state decisions with a qualified attorney and CPA.
The questions this tool walks you through
Here is what the checker asks and why each step matters. Prefer to talk it through? Contact us and we will help directly.
Do you plan to raise money from outside equity investors, or grant stock options to attract employees?
Venture and angel investors, and standard option plans, are built around C-corporation stock - not LLC units.
Plan a C-corporation with counsel before you issue any equity.
Official guidance: SBA choose your business structure
Will the business have more than one owner?
The number of owners changes both the default tax treatment and the paperwork you need in place.
Use the interactive tool above to see how this applies to your situation.
Official guidance: SBA choose your business structure
Across all owners, do you expect net profit above roughly $80,000 a year after paying the active owners a reasonable salary?
Above that range, an S-corporation election often saves more self-employment tax than it costs in payroll and admin - commonly cited, confirm your numbers.
Have a CPA model an S-corporation election on the LLC or corporation. Form a multi-member LLC and put the economics in an operating agreement.
Official guidance: SBA choose your business structure
Does the business carry real liability exposure - customers, contracts, employees, products, premises, or debt - you want kept away from your personal assets?
A liability shield is the main reason to form an entity at all; without exposure, the simplest option can be enough to start.
Use the interactive tool above to see how this applies to your situation.
Official guidance: SBA choose your business structure
Do you expect net profit above roughly $50,000 a year after paying yourself a reasonable salary?
For a profitable solo owner, taking part of the profit as distributions instead of salary can cut self-employment tax - once profit clears this rough range.
Have a CPA model an S-corporation election on a single-member LLC. Form a single-member LLC and keep business and personal finances separate.
Official guidance: SBA choose your business structure
Are you mainly testing the idea right now - low risk, no employees, and willing to revisit the structure as it grows?
A sole proprietorship is the cheapest way to start, but it gives no liability shield and taxes all profit as self-employment income.
Start as a sole proprietor, but set clear triggers to convert to an LLC. Form a single-member LLC for the liability shield.
Official guidance: SBA choose your business structure
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