How It Works

The structure you choose for your business will impact your tax bill, ability to attract investors, liability, and more. This hybrid Coach and quiz allows you to learn about and compare the four most popular business structures: sole proprietorship, partnership, LLC, and corporation. You’ll select the one that best suits your business in six key areas. At the end, the quiz will reveal the best overall option for you and your business. To begin, click "Get Started.”

Illustrations by: Chelsea Miller

Choosing a Business Structure

Each business structure has its own advantages and disadvantages. The key to choosing between them is to find which will best suit your needs and preferences in the most areas. This quiz highlights the six main aspects where these structures differ. An overview of each structure is included below.

Sole Proprietorship

A sole proprietorship is a business owned by a single person where there’s no distinction between the business and the owner.

Partnership

A partnership is a business owned by multiple people with no distinction between the business and the owners. It isn’t uncommon to have a partnership of only 2 to 3 people, but it can go up to 20 in most cases.

LLC

An LLC (Limited Liability Company) is a business owned by “members,” of which there can be one or several. There's a clear line between business and personal assets for the member(s) and more flexibility than other business types.

Corporation

A corporation is a company that is its own entity. This means that it can be taxed, held legally liable for debt, and even make a profit as a separate entity from its owners (shareholders).

Factors to Consider

The most important distinctions between these business structures are found in six categories:

  • Risk Level
  • Size
  • Ownership & Day to Day Operations
  • Investors
  • Startup Effort
  • Taxes

This quiz is designed to make the differences between each clear by going through these aspects and outlining the pros and cons related to each structure. You’ll select which structure(s) you prefer for each aspect and the quiz will tally everything up for you at the end, revealing which structure will be the overall best option for you and your business.

Disclaimer
While we hope you find this content useful, it is only intended to serve as a starting point. Your next step is to speak with a qualified, licensed professional who can provide advice tailored to your individual circumstances. Nothing in this article, nor in any associated resources, should be construed as financial or legal advice. Furthermore, while we have made good faith efforts to ensure that the information presented was correct as of the date the content was prepared, we are unable to guarantee that it remains accurate today.

Neither Banzai nor its sponsoring partners make any warranties or representations as to the accuracy, applicability, completeness, or suitability for any particular purpose of the information contained herein. Banzai and its sponsoring partners expressly disclaim any liability arising from the use or misuse of these materials and, by visiting this site, you agree to release Banzai and its sponsoring partners from any such liability. Do not rely upon the information provided in this content when making decisions regarding financial or legal matters without first consulting with a qualified, licensed professional.
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