What is the best type of business entity for e-commerce?

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What is the best type of business entity for e-commerce?

My husband and I will be starting two different
companies but both will be e-commerce. We’d
like to register as one parent company and two
DBA’s in Michigan. What is the best type of
business entity for tax purposes?

Asked on June 4, 2019 under Business Law, Michigan

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 2 years ago | Contributor

Generally, for almost all purposes unless you anticipate growing this to the point where you can go public and do an IPO, and LLC is the best structure. An LLC provides liability protection to the owners; let's you take "pass through" or "disregarded" tax treatment, so there is no separate "corporate" taxation--the profits or losses drop directly to the owners' ("members") bottom line and they pay the taxes on them once, instead of having the profits taxed at the corporate level first then again when the money is distributed to you; and an LLC involves less paperwork and record-keeping than a corporation.


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