February 22, 2024

Succeed in Self-Employment: How to Choose The Best Business Structure for Liability and Taxes (S Corps, C Corps, LLCs, Sole Proprietorships)

28 minutes

Learn how to choose the right business structure for financial success and legal protection as a self-employed entrepreneur with answers to common questions.

How do you select the right business structure when you’re self-employed?

What are the financial implications of different business structures on personal finances?

Hosts Sean Pyles and Elizabeth Ayoola help you understand how to navigate your business's legal identity by comparing business structures for self-employment. They begin with a discussion of different business structures available for self-employment, with tips and tricks on separating personal liability from business, the ease of filing taxes as a pass-through entity, and the importance of obtaining an EIN for building business credit.

Then, Elizabeth talks to Bryan Jackson, certified financial planner and senior wealth advisor at Beacon Pointe Advisors, about the nuances of LLCs, S corporations, and traditional corporations. They discuss the pros and cons of each structure, the flexibility of LLCs in terms of membership and taxation and the more stringent requirements of S corps.

How do you navigate the complex process of business formation?

What should you consider when transitioning from self-employment to business ownership?

Bryan talks through the critical questions that shape your enterprise's future, offering guidance on the implications of single versus multiple ownership, the relevance of non-U.S. partners and the significance of share transferability. He also delves into topics such as the distinction between being self-employed and a business owner, the benefits of formalizing a business early, and the different financial impacts of each business structure on personal finances.

In their conversation, the Nerds discuss: business structure, entrepreneurship, LLC, S corp or S corporations, sole proprietorship, business formation, financial success, self-employed, types of corporations, liability protection, tax implications, financial planning, business entities, choosing a business structure, small businesses, business credit, pass-through taxation, business ownership, liability, taxes, legal identity, business registration, EIN number, business bank account, corporate veil of protection, liability exposure, side hustles, business credit profile, business incorporation, liability separation, SBA loans, tax preparation, self-employment journey, business liabilities, business profits, and tax filing.

To send the Nerds your money questions, call or text the Nerd hotline at 901-730-6373 or email [email protected].

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By NerdWallet Personal Finance

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