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Although a C corporation offers business owners more legal protection than either a sole proprietorship or partnership, it is more complicated and expensive to set up. Some states require an attorney to file the articles of incorporation. And many C corporations find that an accountant is necessary to manage the tax and other financial implications of incorporation.

A Subchapter S corporation, like a C corporation, is a separate legal entity. The owners of an S corporation have the same legal protection as other corporate owners. An S corporation, however, is not taxed as a corporation. Shareholders in an S corporation report their share of the S corporation’s profits as personal income when they file their personal income tax returns. Usually, an S corporation is a simpler financial and legal entity than a C corporation.

Learn as much as you can about the business structure options available to you. Consult with your accountant. Then take your questions and decisions to your attorney. The attorney will do the legal work necessary to set up your legal business structure.