Before deciding what kind of corporation would best suit your business's needs, it's always good to seek the advice of your attorney. Some of the more common types of corporations are general corporations, close corporations, S-corporations, and limited liability companies.

General corporations. These are the most common legal structure. This is a legal entity that is owned by an unlimited number of stockholders who are personally shielded from debts or obligations related to the business.

Close corporations. Close corporations have a small number of shareholders, ranging from 30 to 50, no ready market for the corporation's stock, and active participation by the majority of shareholders in the management of the corporation.

S corporations. This type of corporation provides the benefits of incorporation, but it eliminates "double taxation," which is when the profits of a corporation are taxed first as income to the corporation and then second as income to the shareholders when profits are distributed as dividends. An S corporation is limited to 75 or fewer shareholders.

Limited liability company (LLC). An LLC is a business entity formed upon filing articles of organization with the proper state authorities. LLCs generally provide limited liability to their members, and are taxed like a partnership, preventing double taxation.