1. Sole Proprietorship

• • A business owned and operated by a single individual.
  • The simplest and most cost-effective structure to establish.
  • The owner has full control over decision-making but is personally liable for business debts.
  • Profits and losses are reported on the owner’s personal tax return.

2. Partnership

• • A business owned by two or more individuals who share profits, losses, and responsibilities.
  • Requires a partnership agreement to outline roles, responsibilities, and profit distribution.
  • Can be a General Partnership (GP) or a Limited Partnership (LP).
    • GP: All partners share equal responsibility and liability.
    • LP: Includes at least one general partner with full liability and one or more limited partners with liability limited to their investment.

3. Limited Liability Company (LLC)

• • A flexible business structure that combines aspects of partnerships and corporations.
  • Provides limited liability protection, meaning owners (members) are not personally responsible for business debts.
  • Allows for pass-through taxation, avoiding corporate taxes.
  • Requires filing Articles of Organization with the Missouri Secretary of State.
    • If you live in a state other than Missouri, check with Secretary of State’s website to see if an Articles of Organization is required.

4. S Corporation

• • Profits and losses pass through to shareholders, avoiding corporate taxes but subject to ownership restrictions.

5. C Corporation

• • Profits are taxed at the corporate level, and dividends are taxed at the personal level (double taxation).