What is the simplest and best way to establish a business?
A sole proprietorship or partnership is the simplest setup, and basically requires no legal forms. Incorporation as either an LLC or an S-Corp is more complex, but has the great legal advantage of limiting liability to the entity, away from personal assets. A C-Corp is the most complex, but is required when you want multiple classes of stock, or have over 100 shareholders. For income tax purposes, you can have a corporation taxed as a sole proprietorship, or vice versa (Entity Classification Form 8832, or Form 2553 Election by a Small Business). An LLC with two or more members (even husband and wife) will default to a partnership for tax purposes, and must file Partnership Form 1065, and report income through Schedule K-1. The tax election never overrides the legal considerations of the original entity above.
