ABSTRACT
There are multiple types of business organizations. The basic types of business organizations are discussed in this chapter. These include sole proprietorship, general partnership, limited partnerships including family limited partnerships (FLPs), limited liability companies (LLCs), corporations (either subchapter C or subchapter S of the Internal Revenue Code), and cooperatives. The choice of a form of business organization depends upon many factors that are discussed in this chapter. Reducing tax obligations is one of the first objectives that with most people when they choose a form of business organization. There are state and federal income taxes, franchise taxes, excise taxes, state inheritance or estate taxes, federal estate taxes, real estate taxes, personal property taxes, sales taxes, and others that are as diverse as the governmental entities in the United States that assess taxes. In choosing a form of business organization, it is essential to determine the types of taxes that the business will face and estimate the taxes due for each under each of the types of business organizations being considered. For many farms, federal farm program payment limitations are an important factor discussed in this chapter.
