• Sole proprietorship: one person-owned endeavor that is technically not a separate legal entity from the individual. It can operate under an assumed name (a DBA)
• Corporation: Either S or C corporation. The only difference has to do with how the business is taxed. A “C corp” is taxed as a legal entity separate from the individual, so there is double taxation. In an “S corp,” the corporation is not a separate taxpayer. Owners pay their share of taxes on the income generated by the corporation. An S corp is also known as “Pass through Entity.” If the corporation earns $1, the corporation does not pay tax on that dollar. Instead, the company reports that income to its shareholders who are then taxed on it.
• Three types of partnerships: General, limited and limited liability
• Limited liability corporation: An LLC is a hybrid of a corporation and a partnership

Why incorporate?
Formalizing a legal entity by incorporating in some way provides at least one important benefit. According to Hollingsworth, forming a separate legal entity limits personal liability for corporate matters.

In other words, “Your liability is limited to the amount of capital invested in the business. That means your personal assets are not subject to judgment,” he says.

That is, of course, assuming the company owner has not co-mingled their personal funds with those of the legal entity. To prevent that, Hollingsworth suggests the incorporator do two things: open and maintain a banking portfolio for the business separate from their personal accounts and operate them separately from one another.

According to Incorporate.com, there are five other reasons to incorporate. They are:

• Tax flexibility and incorporation tax benefits
• Enhanced credibility
• Brand protection
• Perpetual existence
• Deductible expenses

The Small Business Administration offers an extensive checklist about incorporating. For further information, consult https://www.sba.gov/category/navigation-structure/starting-managing-business/starting-business/choose-your-business-stru.