1. What You Need to Know About Choosing a Business Structure
Written by
Annette Dunlap, MBA
Extension Associate
Ag & Resource Economics
NC State University

2. The Value-Added & Alternative Agriculture Start-up Toolkit
Program Outline
Overview of Business Structures
Sole Proprietorship
Partnership
LLC, LLP, S-Corporations
Resources
The Value-Added & Alternative Agriculture Start-up Toolkit

3. Business Legal Structures
Sole Proprietorships
Partnerships
Limited Liability Partnerships/Limited Liability Corporations (LLPs/LLCs)
S Corporations
Note: All businesses must apply for an Employer Identification Number (EIN) from the IRS
The Value-Added & Alternative Agriculture Start-up Toolkit

4. The Value-Added & Alternative Agriculture Start-up Toolkit
Sole Proprietorships
Easiest of the business structures to form
Allows profit (loss) to be taxed at personal income rate
Exposes business owners to greatest legal liability
The Value-Added & Alternative Agriculture Start-up Toolkit

5. The Value-Added & Alternative Agriculture Start-up Toolkit
Partnerships
Unincorporated partnerships can be formed with a written partnership agreement
Income can be distributed to partners and taxed at each partner’s tax rate
Unincorporated partnerships put all partners at risk
The Value-Added & Alternative Agriculture Start-up Toolkit

6. LLCs, LLPs and S-Corporations
Legal entities established through the NC Secretary of State’s office
Offer special legal protections - personal assets are protected; corporate assets are at risk
S-Corporation is a federal tax designation available to corporations
The Value-Added & Alternative Agriculture Start-up Toolkit

7. Corporate Reporting & Tax Requirements
LLC’s, LLP’s and corporations must file annual reports (along with a fee) to the NC Secretary of State’s office
Profits from the corporations are reported and can be taxed at the individual’s tax rate
The Value-Added & Alternative Agriculture Start-up Toolkit

8. The Value-Added & Alternative Agriculture Start-up Toolkit
Important!
Consult an attorney, an accountant AND/OR a business insurance professional before making any decisions regarding a business structure and when filing your tax returns
The Value-Added & Alternative Agriculture Start-up Toolkit

9. The Value-Added & Alternative Agriculture Start-up Toolkit
Next Step Resources
US Internal Revenue Service:
NC Secretary of State’s office:
General resource for businesses:
The Value-Added & Alternative Agriculture Start-up Toolkit