In reference to undertaking a new and arduous endeavor, Chinese philosopher Lao-tzu is quoted as saying, “A journey of a thousand miles begins with a single step.”
If he were reincarnated as a modern accountant or business lawyer, he might tell a client about to start another type of new and arduous endeavor, “The key to a successful small business is choosing the right legal entity.”
These entities vary widely in terms of difficulty to create and maintain, as well as in their tax and legal advantages. Knowing which one will work best for you — and when you might need to change it — can often be confusing, so let’s take a closer look at four of the most common types.