Here are the types of structures typically considered:
An Internet search using “compare business structures” will reveal several different charts from several different vendors that show the benefits and disadvantages for each.
Here are some tidbits to help you with your decision:
You have to get a federal tax ID if your business is anything other than a sole proprietorship. Instructions for online registration are at the IRS website.
All business types that have employees (regardless of the structure chosen) must get a state tax identification number, and register for both income tax withholding and unemployment Insurance tax. The State of Tennessee has a One Stop Business Resource website that can help you decide on a name, file a business charter, obtain a state tax ID number, and obtain an unemployment insurance number.
Some companies need business licenses and some don’t. You may need a business license both in your city and in your county. Check with your County Clerk to see if you need a county business license and with your city clerk to see if you need a city business license.
There may be other licenses or permits needed to run your business, depending on the type of business. For example, a home-based Internet business may only require a Tennessee business license to operate. However, a retail store may have to obtain a business license, zoning permit, seller’s permit, and a sales tax license. Contact your city or county clerk to ensure the business has met all legal obligations.
Anderson Center for Entrepreneurship & Innovation ~ 418 Haslam Business Building
Knoxville, TN ~ 37996-4140 ~ Phone: (865) 974-5126 ~ Email: ACEI@utk.edu
Knoxville, Tennessee 37996 | 865-974-1000
The flagship campus of the University of Tennessee System