Entity Type - ENGAGE CPAs

An entity type describes how your business is structured. The options for entity type are Sole Proprietorship, Single-Member LLC, Partnership and Corporation. Remember, an S-Corporation is not an entity structure, it's actually an election made at the federal level to have your LLC or Corporation taxed differently.
Each entity type has its pros and cons and there are various factors to consider when determining which entity type is right for your business. Consider the number of owners the entity will have, the type of goods or services the business will provide, the location where income will be earned, the likelihood that someone will sue the business, and the owner's tolerance for risk.