When you're starting a new business, choosing the right entity type is important. You can choose a variety of entities: corporations, limited liability companies (LLCs), nonprofits, partnerships or even sole proprietorships. If you don't choose, your entity type will default to the entity most advantageous to the state.
If you are starting your own business, you may be weighing the type of entity you should choose. One of those options is the corporation, but what type is best for you?
If you're thinking about starting a business, you have probably heard about the limited liability company, or LLC. It is a popular type of business entity for several reasons. First, it protects your personal assets from being used to pay business losses or other liabilities. Second, it allows pass-through taxation to the owners ("members") of the LLC.