What is the biggest difference between an S corporation and a C corporation?
The biggest difference—and the main reason why people who start companies elect to create an S corporation instead of a C corporation is to avoid paying the double taxes that shareholders of C corporations must pay.
What is an "LLC"?
An LLC, or limited liability company, is a business structure allowed to exist by state statute. Accordingly, each state has different laws to regulate its LLCs. It provides limited liability to its owners in most U.S. jurisdictions . LLCs do not need to be organized for profit. People who own LLCs are referred to as members, and there is no limitation to the number of LLC members. Members may include individuals, other corporations, other LLCs, and foreign entities. LLC members cannot be held personally liable for the company's debts or liabilities, providing a degree of protection for the owners' personal assets outside the LLC. Also, members are not taxed twice on their profits. The IRS has special rules regarding LLCs; consult with a tax adviser for more information.
What are some early steps I should consider before starting my own business?
According to entrepreneurship expert Alan Hall, if you are a prospective business creator you should keep your "day job" as long as possible (especially if you intend to use income from your employment to fuel your start-up company); give yourself a time frame or goal (for example, one year), as this will allow you to focus your energy in order to attain the goal; honor your signed non-compete agreement, if your employer has required this; try specifically to create the purpose, vision, and strategy of the idea; test assumptions on the market; know your market size and the portion of the market that best matches your idea; consider all aspects of competitive offerings; evaluate the viability of your product or service; determine how the product will be sold and purchased; how you will collect revenues; and create a plan and budget on the profitability of your product or service.