Pick Your Business Entity

Sole Proprietorships

One person is responsible for all debts and profits of the company.

LLCs

An LLC, or Limited Liability Company, is a business structure in the U.S. that combines aspects of both corporations and partnerships.

•  An LLC provides its owners, also known as members, with limited liability protection like a corporation, meaning they are not personally responsible for business debts. At the same time, it allows profits and losses to pass through directly to the members’ personal income without corporate taxation, similar to a partnership. This flexibility makes it a popular choice for small to medium-sized businesses.

• NOLO provides basic steps on forming an LLC in Hawaii.

Non-Profit Corporations

A non-profit corporation is an organization set up to focus on activities that help the community, like education or charity, instead of making money. Any extra money they make is put back into their mission, not given out as profits to owners.

C-Corps

A C-corp is a type of corporation in the U.S. that is taxed separately from its owners, allowing it to grow by selling stock and protecting owners from personal liability, but profits may be taxed twice—once at the corporate level and again when dividends are paid to shareholders. 

• NOLO’s article provides 7 steps on how to start a corporation. 

S-Corps

An S-corp, or S corporation, is a special type of corporation in the U.S. that allows profits and other financials to be passed directly to shareholders, thus avoiding double taxation on corporate income. This status is available to companies with up to 100 shareholders and meets other IRS qualifications. 

B-Corps

A B-corp, or Benefit Corporation, is a type of corporate structure recognized by U.S. law that allows companies to prioritize social and environmental goals alongside the traditional corporate objective of profit maximization. B-corps are legally empowered to consider the impact of their decisions on their workers, customers, suppliers, community, and the environment, which is a shift from traditional corporate obligations that prioritize maximizing shareholder returns.

Close Corps

A close corporation, also known as a closely held corporation, is a type of business entity that operates with a limited number of shareholders and does not generally offer its stock for public trading. Close corporations are typically smaller, family-owned businesses where the shareholders are often involved in the day-to-day management, and the shares do not change hands frequently. This structure allows for more relaxed corporate governance structures compared to publicly traded companies.

Partnerships

Owned by 2 or more people. 2 types – general (shared equally) and limited partnerships (one person controls operations and the other contributes to and receives part of the profits.

Confused on which business structure to choose?