Which Business Entity is Right for You?

Determining the best entity structure for your new business is challenging. That’s where NCH comes in. We’ll help you choose the right structure for your business regardless of the industry.

Business Entities

As a business owner, you should have the foresight on what entity structure best suits your business or venture. So, we’ve compiled a quick guide explaining the advantages and disadvantages of the different business entities available. Keep in mind that these are general overviews. When it’s time to decide, contact NCH for a FREE consultation. Whichever entity you choose, we’ll make sure it provides the maximum tax and asset protection benefits available.

What Is a Business Entity?

A business entity is a legal structure created to conduct business activities. It can take different forms, such as a limited liability company (LLC), sole proprietorship, partnership, corporation, non-profit, and franchise. Business entities are separate from their owners and have their own legal rights and obligations.

These entities are used to organize and manage businesses, and they provide various benefits, such as protecting personal assets, limiting liability, and facilitating tax planning.

Why Choosing the Right One Matters

Liability Protection

Different business entities offer varying degrees of liability protection for the owners. For instance, a corporation provides the strongest liability protection, whereas sole proprietorships offer the least. If the business has been sued or faced financial struggles, the right business entity can shield the owners’ personal assets from being seized to pay off debts.

Tax Implications

Each business entity has different tax implications. A sole proprietorship is taxed as an individual, while a corporation is taxed separately. You can minimize tax liabilities and maximize tax benefits with the right business entity.

Ownership Structure

Some business entities, such as partnerships and corporations, allow for multiple owners, while others, such as sole proprietorships, do not. Having the right one can help to ensure that the ownership structure aligns with the business’s goals and objectives.


Certain business entities, such as corporations, can issue and sell stocks to investors to raise capital. Other entities, such as sole proprietorships, may have limited options for raising funds. The proper business entity can help to facilitate fundraising efforts.

Growth and Expansion

As a business grows and expands, changing its legal structure may be necessary to accommodate its evolving needs. Choosing the right business entity from the outset can help ensure the business is well-positioned for future growth and expansion.

Let’s Find the Right Entity for You

NCH is here to help you understand what business entities are and how to put up the right one for your unique needs. With our extensive experience and expertise, we can provide guidance that will put you in the best position to succeed.

Regardless of what entity you choose, NCH will guide you every step of the way. Get started by calling one of our business formation specialists at 1-800-508-1729.

At NCH, we’ll work with you no matter which entity you choose. If you need help selecting the entity that best suits your needs or help comparing business entities, please contact a business formation specialist today at 1-800-508-1729.