Before you start a small or home business is the time to understand the various legal forms of business organization. Will you operate your business as a sole proprietorship, a limited liability company (LLC), an S corporation, a partnership, or a full blown C corporation?
You'll want to research issues surrounding the legal form of business organization carefully now, because your decision will affect your startup costs. It will also affect your tax situation and your personal liability for the actions and debts of the business. Take advantage of the IRS for free tax information on the various legal forms of business organization.
Finally, your decision on which legal form of business organization you will use will largely determine what steps you need to take in order to set up your business when you're ready to do so.
