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Foundations for Business Growth

Choose a business structure

Every business has different needs, and these can play a large role in the type of business you are or want to become. Learn about the different business structure types and find your match.


Estimated time: 20m

There are a handful of ways to structure your business, and they’re not all about taxes. Consider:

  • Liability: Do you want to be liable for the financial obligations of your business?
  • Flexibility: What do you and your partners need out of your business structure?
  • Control: How important is it that you control every aspect of your business?
  • Funding: Do you hope to raise capital by selling shares in your business?

Answer a few questions about the needs of your unique business to find which structure may be your best fit.

A C Corporation (C Corp) seems like the best fit for your business

Like any corporation, a C corporation separates the owners from the business. Instead of the owner, a board of directors is responsible for making major business decisions, including hiring, firing and managing the officers who lead day-to-day operations.

The corporation is liable for losses, and the owner is not obligated to use past earnings to pay off debts. Also, the company can create and sell stock to raise capital, with the stockholders becoming partial owners. In fact, a C corporation has no restrictions on who can own stock in the company, and stock can be passed on to others if an owner dies.

One drawback to a C corporation is double taxation: The corporation’s profits are taxed and then shareholders are taxed on their individual distributions. Another potential disadvantage is that having a board of directors means the founder must give up some control over the company. If the board’s view of corporate performance is different from the founder’s, the board can vote down the founder’s proposals. The board can even fire the founder if performance is not meeting expectations. The legal and accounting costs of setting up a C corporation are also a downside, as they are higher than a sole proprietorship or a partnership. You’ll need cash on hand to go this route.

Revise your answers

A S Corporation (S Corp) seems like the best fit for your business

An S corporation provides liability protection for owners, and both types face similar challenges. For example, they are required to have a board of directors, hold shareholder meetings and pay higher legal and accounting costs.

The biggest difference — and benefit — of an S corporation is that it doesn’t pay taxes at a corporate level. Profits can be passed through as distributions, which are taxed at a lower rate. Also, S corporations have limitations on their ability to sell stock. An S corporation can only have 100 shareholders, and only individuals can hold stock in an S corporation.

Revise your answers

A Limited Liability Company (LLC) seems like the best fit for your business

You can think of an LLC as a mix of partnerships and corporations. An LLC provides liability protection and avoids double taxation by passing earnings on to owners. LLCs have no limits on the number of shareholders, and an LLC owner can fully participate in business operations.

Revise your answers

A Partnership seems like the best fit for your business

Partnerships are similar to sole proprietorships but with multiple owners. Partners are all personally liable for losses and pay payroll taxes on their earnings.

However, since each partner shares in the profits and losses, takes deductions and receives credits on their personal income taxes in proportion to their ownership stake, they can often keep their personal tax liability low. Although, again, payroll taxes cannot be reduced and often eat into any personal income tax savings.

Revise your answers

A Sole Proprietorship (Sole Prop.) seems like the best fit for your business

A sole proprietor is a single owner who has complete control over the business. Many businesses begin as sole proprietorships because the structure is straightforward and it’s inexpensive to get started.

However, a sole proprietor is personally liable for any financial losses. For example, if a sole proprietor is shipped supplies but cannot make enough revenue to pay the supplier, the owner can be sued for the remaining balance. On the plus side, sole proprietors can buy liability insurance to protect them from many types of losses.

Sometimes, sole proprietorships also pay more in taxes since business revenue is viewed as personal income, which means they must pay both the business and personal shares of payroll taxes such as Social Security and Medicare.

Revise your answers
C Corp S Corp LLC Partnership Sole Prop.
Owners have limited liability protection on business debt and liabilities checked checked checked unchecked unchecked
Registers with the state checked checked checked unchecked unchecked
Continues to exist even if owners leave the business checked checked checked unchecked unchecked
No owner limits checked unchecked checked checked unchecked
Not limited to U.S. citizens and permanent residents checked unchecked checked checked checked
May be owned by another business rather than individuals checked unchecked checked unchecked unchecked
Can issue stock checked checked unchecked unchecked unchecked
Owners report their share of profit and loss on their individual tax returns (passthrough) unchecked checked checked checked checked
Owners can split profit and loss with the business for a lower overall tax rate checked unchecked unchecked unchecked unchecked
May distribute special allocations under certain guidelines unchecked unchecked checked checked unchecked
Required to hold annual meetings and record meeting minutes checked checked unchecked unchecked unchecked
Learn More Learn More Learn More Learn More Learn More

Local Small Business Development Centers (SBDCs), the Service Corps of Retired Executives (SCORE) and other organizations offer free or low-cost counseling to help business owners get started or grow their business. Attorneys and accountants TIP charge a lot more but can offer more in-depth guidance.

When your business is more than a business

If you want your business to be a force for good in the world, you might consider forming a Certified B Corporation. B Corps are legally required to consider the impact of their decisions on workers, customers, suppliers, communities and the environment. Together, and as individual businesses, B Corps work to reduce poverty and inequality, strengthen communities, push for equity and justice and more.

To form a B Corporation, your business will need to get certified. To learn about the process, visit

* The "B" in "B Corporation" does not refer to an entity classification for U.S. tax purposes, but instead to a private certification that measures a company's entire social and environmental performance.

Business Checking

Chase offers a wide variety of business checking accounts for small, mid-sized and large businesses. Compare our business checking solutions and find the right checking account for you.

Business Loans

Finance your small business with business loans from Chase. Find a variety of financing options including SBA loans, commercial financing and a business line of credit to invest in the future of your business.

Business Credit Cards

Find and apply for the Ink business credit card best suited for your business. Compare the benefits of the Ink business credit cards.

Payment Solutions

Accept debit and credit cards with safe, secure, and convenient Payment Solutions from Chase anywhere you do business – online, in-store, and on the go. Visit our Developer Center to find Payments APIs, developer tools, and documentation.

Business Savings

Chase offers a variety of business savings accounts including Total Savings, Premier Savings and a business CD. Compare savings accounts and find the right business savings account for you.

Business Debit Cards

More convenient than cash and checks - money is deducted right from your business checking account. Make deposits and withdrawals at the ATM with your business debit card. Save time every month with recurring payments.

Commercial Banking

Commercial Banking provides businesses with annual revenues ranging from $20 million to more than $2 billion with a range of domestic and international solutions including investment banking and asset management - designed to help you achieve your business goals.

Business Services

We're here to help with your business banking needs. From payment processing to foreign exchange, Chase Business Banking has solutions and services that work for you.

Retirement Plans

Help your employees plan, save, and invest for their future with 401(k) plan solutions. J.P. Morgan’s low cost retirement plans are built for you and your employees.

For informational/educational purposes only: The views expressed in this educational website and associated resources may differ from those of other employees and departments of JPMorgan Chase & Co. Views and strategies described may not be appropriate for everyone and are not intended as specific advice/recommendation for any individual. Information has been obtained from sources believed to be reliable, but JPMorgan Chase & Co. or its affiliates and/or subsidiaries do not warrant its completeness or accuracy. You should carefully consider your needs and objectives before making any decisions and consult the appropriate professional(s). Outlooks and past performance are not guarantees of future results. Participants compensated.

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