In simple terms there are really only 5 business types and you can only be one. Sole Proprietor, Partnership, LLC, S-Corp, C-Corp. LLC's are designed for small businesses with moderate net income, with some tax benefits such as if you are a single member LLC, you can expense (if the business pays) your health insurance premium, deductible, co-pay etc. If you post a large net income, it would be wise to look into converting to an S-Corp. S-Corp's are limited to the number of share owners, I think the max is 100, all profit has to be disbursed to the members every year. What this means from a financial standpoint, you have to pay yourself a salary that is commencerate with industry average, and the amount of money left at the end of the year gets passed through as profit not subject to self employment tax so you should get to keep more of your money and the government gets less. There are more hoops to jump through as a S-Corp but if you have a high net income, well worth the expense. C-Corps are designed mainly for public companies or companies that want to go public, where there is a need to raise significant amounts of capital from a large number of sources.