Incorporation? Partnership? LLC?
It's important to get off on the right foot, and so choosing your business structure is something that should be looked at carefully, exploring and weighing the different options. There are, of course, a few useful websites out there that will help you do this.
First, you might take a look at the Small Business Administration's "Choosing Your Business Structure" website. Articles on each of the options outline the comparative advantages and disadvantages, from tax issues to fund-raising.
You will also want to check your own state's Secretary of State office, for their information on business structures. Rules can vary by state. The Minnesota Secretary of State office has a website for those interested in starting a business or a nonprofit, with links to helpful local organizations and to the necessary filing forms.
There are other sites out there, of course, that will happily offer advice on this question. Entrepreneur and Inc magazines each spend a bit of time on this topic, and NOLO provides a nice chart outlining the main advantages and drawbacks of each structure. The IRS chips in with links to necessary tax forms, and the Department of Commerce's Minority Business Development Agency closes out with some good advice on researching business structures:
"Go to a library or a large bookstore: Find the small business section where there are various books on how to form an LLC or corporation. A few hours pouring over them will probably give an entrepreneur a basic understanding of the different structures and how to establish them. Many of the books come with a CD offering step by step instructions.
Visit your state's Web site: Every state has a Web site. For example, the Texas and Virginia sites feature a business section where you can find information on how to start a business in that state. They also offer frequently asked questions and toll-free numbers to aid with questions on sales taxes and other information.
Meet with an accountant, business consultant or tax adviser:: Spend a few hundred dollars working with them to help determine which legal entity will be the most financially advantageous for you.
Determine whether you're going to file the paperwork yourself: Once you decide upon a legal structure, you need to determine whether you're going to file for it yourself. In most circumstances, you probably don't need an attorney. But if you have done your preliminary research and you remain confused, there's nothing wrong with hiring a professional or using an online service to incorporate you."