UMKC Innovation Center partners with the university and the community to spark and sustain entrepreneurial efforts within our region and across the country.

KCSourceLink connects KC entrepreneurs to the right resource at the right time.

MOSourceLink connects Missouri entrepreneurs to the right resource at the right time.

Whiteboard2Boardroom connects entrepreneurs and businesses to technologies available for licensing.

Digital Sandbox KC provides early-stage proof-of-concept support for digital products.

Missouri Small Business & Technology Development Center provides technical assistance to startup and existing businesses.

ScaleUP! Kansas City helps businesses with revenues around $200K scale toward their first $1 million.

Missouri Procurement Technical Assistance Centers helps local businesses obtain government contracts.

KCInvestED helps investors learn more about investing in KC startups.

SourceLink® helps communities nationwide build vibrant and vital entrepreneurial ecosystems.
UMKC Innovation Center

Guide: Start a Business  Part Five

Forms of Business Organization

One of the first decisions that you’ll have to make as a business owners is how your business should be structured. You need to know the advantages and disadvantages of each of the different forms of business organization to make sure you’re making the right decision for your new business.

All businesses must adopt some legal configuration that defines the rights and liabilities of participants in the business’s ownership, control, personal liability, lifespan and financial structure. The form of business determines which income tax return form to file and the company’s and owners legal liabilities.

This is a big decision that has long-term implications, so if you’re unsure of which form of business is best for your company, you’ll want to consult a professional. Luckily, there are several business counselors and centers across Missouri offering free assistance in forming a business that are knowledgeable and ready to help.

When you’re forming your new business, you will want to take into account the following:

  • Your (practical) vision regarding the size and nature of your business.
  • The level of control you wish to have.
  • The level of “structure” you are willing to deal with.
  • The business’s vulnerability to lawsuits.
  • Tax implications of the different organizational structures.
  • Expected profit (or loss) of the business.

>> Need a little help? Fill out our help form so we can assist you in coming up with a plan that is personalized for your business and life. Bonus: our services are always free.

Now let’s dig into the different forms of business organization.

Sole proprietorship

The vast majority of small businesses start out as sole proprietorships. These businesses are owned by one person, usually, the individual who has day-to-day responsibility for running the business. Sole proprietors can be independent contractors, freelancers or home-based businesses.

Sole proprietorship advantages

  • Owner receives all the profits
  • Profits are taxed only once
  • Owner makes all decisions and is in complete control of the company (could also be a disadvantage)
  • Easiest and least expensive form of ownership to organize

Sole proprietorship disadvantages

  • Unlimited liability if anything happens in the business. Your personal assets are at risk (including your home in Missouri)
  • Limited in raising funds and may have to acquire consumer loans
  • No separate legal status

Tip: When looking at setting up a sole proprietorship, assess what type of liability you have. If you’re selling advice or services, you may need an errors and omissions insurance policy to cover yourself against claims for negligence. Determine what you have to lose. Do you own a home or savings account? Your personal assets could be at risk in the case of a lawsuit.


In a Partnership, two or more people share ownership of a single business. Like proprietorships, the law does not distinguish between the business and its owners. The partners should have a legal agreement that sets forth how decisions will be made, profits will be shared, disputes will be resolved, how future partners will be admitted to the partnership, how partners can be bought out or what steps will be taken to dissolve the partnership when needed

Disclaimer: If you’re establishing a partnership, it is extremely important to make sure everything is outlined in case things go sour, especially in the case of starting a business with a loved one or friend. Seek legal advice to create a partnership operating agreement to hash out all business decision possibilities including succession or exit plans. There are several legal services in Missouri ready to assist you every step of the way.

Partnership advantages 

  • Easy to establish (with the exception of developing a partnership agreement)
  • Separate legal status to give liability protection
  • Profits taxed only once
  • Partners may have complementary skills

Partnership disadvantages

  • Partners are jointly and individually liable for the actions of the other partners
  • Profits must be shared with the partners
  • Divided decision making
  • Business can suffer if the detailed partnership agreement is not in place


A corporation is considered by law to be a unique entity, separate from those who own it. A corporation can be taxed, sued and enter into contractual agreements. The corporation has a life of its own and does not dissolve when ownership changes.

There are three types of corporations: C-corporation, S-corporation and Limited Liability Company.


A C-corporation is a corporation that is taxed separately from its owners. It gives the owners limited liability encouraging more risk-taking and potential investment.

C-corporation advantages

  • Limited liability
  • Transfer of ownership, shareholders can sell their shares
  • Capital is easier to raise through the sale of stock
  • Company paid fringe benefits
  • Tax benefits

C-corporation disadvantages

Double taxation (corporation and shareholder earnings taxed)

Can be costly to form

More administrative duties - required by law to have annual meetings, notify stockholders of the meeting, must keep minutes of meetings and turn in

Pay corporate taxes at a different time than other forms of business


An s corporation also known as subchapter S-corporation offers limited liability to the owners. S-corporations do not pay income taxes rather the earnings and profits are treated as distributions. The shareholders must report their income on their individual income tax returns.

S-Corporation advantages

  • Limited liability
  • Avoids double taxation
  • Profits taxed only once
  • Capital is easier to raise through the sale of stock
  • Transfer of ownership

S-Corporation disadvantages

  • Can be costly to form
  • Stockholders limited to individuals, estates or trustees
  • Required administrative duties
  • Cannot provide company paid fringe benefits
  • Stockholders are limited to citizens or resident aliens of the United States

Limited Liability Company

A limited liability company or LLC is a hybrid business structure that provides the limited legal liability of a corporation and the operational flexibility of a partnership or sole proprietorship. However, the formation is more complex and formal than that of a general partnership.

Tip: Forming an LLC requires the business owner to file legal paperwork. You may want to consult an attorney to assist you with the process. Here is a list of service providers in Missouri that provide legal assistance.

Limited liability company advantages

  • Most common business structure and specifically created for small businesses
  • Must have insurance in case of a suit
  • Separate legal entity
  • Usually taxed as a sole proprietorship
  • Unlimited number of owners

Limited liability company disadvantages

  • Can be costly to form
  • Yearly administrative costs
  • Personal tax liability
  • Legal and accounting assistance is recommended

Who can help?

Many business-building organizations in Missouri offer legal services to help you through these beginning stages of launching your business. Start with this list or pop over to The Resource Navigator to filter this list by your location, industry and more.

Remember if you need help, give us a call at 866-870-6500 or send us a message. We can guide you through the next steps you need to take to start your business.


Ameren Accelerator - UMSL Accelerate

The Ameren Accelerator is an innovative partnership with the University of Missouri System, UMSL Accelerate and Capital Innovators designed to invest, mentor, and accelerate the growth of next-generation energy technologies.

Center for Emerging Technologies (CET)

The Center for Emerging Technologies (CET) provides specialized facilities and business, technology and financing services to early-stage medical (diagnostics, therapies, instrument and devices) and other advanced technology companies.

City of Albany

The City of Albany is committed to providing support and opportunity to entrepreneurs and business start-ups as well as established business expansion and retention services.

City of Boonville Economic Development

Boonville is a great place to make your business home! The economic development office is ready to assist you in finding the right spot. and helping you grow.

City of Kansas City, MO-KCBizCare

KCBizCare is a division of the City of Kansas City, Missouri City Manager's Office. KC BizCare is a free business resource, advocacy and information center for new and existing businesses operating within the City.

City of Springfield Economic Development Office

The Springfield Economic Development Office works in partnership with the Springfield Area Chamber of Commerce, Springfield Business Development Corporation, City Utilities of Springfield, and Greene County to facilitate and promote business development within the City of Springfield, as well as throughout the Springfield region. The Office provides development assistance and incentives, and serves as a facilitator for major economic development projects to ensure timely approval of plans and permits.

Douglas C. Greene Center for Innovation and Entrepreneurship

Located on the campus of Southeast Missouri State University (SEMO), the Innovation Center provides easy access to many services needed by start-up businesses such as business counseling, training, and access to US SBA programs and services.

Economic Development Corporation (EDC) - Kansas City, MO

The Economic Development Corporation (EDC) is a not-for-profit organization with a staff of apx. 30 people that is the City of KCMO's primary development organization & provides assistance to new and expanding businesses already located in Kansas City, Missouri, or those considering a Kansas City location. In addition, the EDC administers the City's TIF program, LCRA, and Enhanced Enterprise/Zone Works program.


The efactory is an entrepreneurship center designed to assist startup and growth in new small businesses and continuing education and training in mature organizations.

Entrepreneurial Legal Services Clinic and Intellectual Property Clinic at UMKC

The UMKC Entrepreneurial Legal Services Clinic and Intellectual Property Clinic provides legal advice to owners of small businesses who cannot otherwise afford such services.

Entrepreneurship and Intellectual Property Clinic - Washington University in St. Louis

Legal clinic at Washington University offering limited IP advice (patent and trademark searches and opinions) to for profit clients and full transactional legal services to nonprofit clients.

Environmental Assistance Center, MU

The Environmental Assistance Center helps businesses, institutions and government develop and implement industry-specific solutions that result in significant, measured greenhouse gas, energy, water, waste and cost reductions.


The world's leading provider of high-quality learning curricula and networks specific to innovation and entrepreneurship.


GatewayVMS promotes entrepreneurship education and leadership through team mentoring of new ventures at no cost by experienced serial entrepreneurs and business persons within the metro St. Louis area.

Grace Hill Women's Business Center

Business development program with a focus on training and counseling for entrepreneurs to start and expand their business.

Green Hills Regional Planning Commission

The Green Hills Regional Planning Commission is a regional organization providing economic development services in an 11-county area in North Central Missouri.

Hispanic Economic Development Corporation

The Hispanic Economic Development Corporation (HEDC) is dedicated to improving the lives of Latinos within the greater Kansas City. HEDC achieves this through business development and economic and community wealth creation initiatives.

Innovation Stockyard

The Innovation Stockyard operates the Kit Bond Science and Technology Incubator on the campus of Missouri Western State University with a focus on economic and workforce development, and animal health and nutrition.

International Institute of St. Louis - Small Business

Provides a wide variety of services to linguistically and culturally disadvantaged business owners; including business loans for immigrants and refugees, a Credit builder Loan, among other services.


Catalyst for Tech Innovation since 2008. ITEN provides programs for the rapid development of scalable tech innovation, engaging experienced entrepreneurs to help others build successful, growing companies.

Jefferson City Area Chamber of Commerce

The Jefferson City Chamber of Commerce is a resource for start-up and existing businesses of all sizes. Discover the benefits Jefferson City has to offer and learn how your business is our focus.

Kansas City Volunteer Lawyers & Accountants for the Arts

Kansas City Volunteer Lawyers and Accountants for the Arts (KCVLAA) is a nonprofit, 501(c)(3) organization that provides legal and accounting assistance to artists and arts organizations.

Kauffman Founders School

Online education program that enables entrepreneurs to learn anywhere, anytime. Leading experts present rich content that founders can immediately apply to their businesses.

Kirksville Regional Economic Development, Inc

We are a 501c3 public private partnership who works with the main industries in the Kirksville region as well as with companies looking to locate to the Kirksville region. K-REDI can provide resources for local and state incentive programs.

Legal Services of Eastern Missouri

Through our Community Economic Development Microenterprise Program, we provide free civil legal assistance to eligible entrepreneurs, small businesses and non-profits. For our nonprofit clients, we represent those who serve and support low-income communities.

Macon County Economic Development

Macon County Economic Development exists to ensure the continued success of our community and help create jobs for future generations.

Missouri Department of Labor and Industrial Relations

The Department works with businesses regarding unemployment, workers' compensation, workplace safety, wage and hour, discrimination, mine and cave safety, and bargaining units for public employees.

Missouri Department of Natural Resources

The Missouri Department of Natural Resources assists businesses with environmental compliance issues, primarily concerning air pollution control.

Missouri Enterprise - Rolla

At Missouri Enterprise, we have our fingers on the pulse when it comes to cutting-edge knowledge in manufacturing. Our certified experts provide a variety of solutions to help your company compete, including workforce development strategies, technology, lean principles, exporting, quality (ISO), food safety and more. As the Show-Me State’s dedicated manufacturing expert, Missouri Enterprise is your partner to strengthen and grow your manufacturing company. Missouri Enterprise has experts located throughout Missouri, dedicated to helping primarily small and medium size manufacturers succeed.

Missouri Rural Enterprise and Innovation Center

The Missouri Rural Enterprise and Innovation Center facilitates innovation-based economic growth in Northeast Missouri. MREIC provides support to entrepreneurs through one-on-one assistance and links to important resources.

Missouri S&T Office of Technology Transfer and Economic Development (TTED)

The Missouri S&T Office of Technology Transfer and Economic Development (TTED) provides support to S&T faculty, students and researchers to provide IP protection, identify licensees and commercialize university inventions, assisting them to convert their innovative ideas into products, technologies, and services that can benefit society.

Missouri SBDC at Northwest Missouri State University - St. Joseph Center

The SBDC offers confidential, one-on-one consulting to existing & emerging businesses as part of their agreement with the U.S. Small Business Administration (SBA).

Missouri Secretary of State, Jefferson City

The Missouri Secretary of State's Office, Secretary of State John Ashcroft, offers a variety of information useful to business owners. The Secretary of State's office provides the necessary information and forms to register a business in the state as well as information pertinent to corporations, LLCs and sole proprietorships.

Missouri Secretary of State, Kansas City Branch Office

The Missouri Secretary of State's Office, Secretary of State, offers a variety of information useful to business owners. The Secretary of State's office provides the necessary information and forms to register a business in the state as well as information pertinent to corporations, LLCs and sole proprietorships.

Missouri Secretary of State, Springfield Branch Office

The Missouri Secretary of State's Office, Secretary of State John R. Ashcroft, offers a variety of information useful to business owners. The Secretary of State's office provides the necessary information and forms to register a business in the state as well as information pertinent to corporations, LLCs and sole proprietorships.

Missouri Secretary of State, St. Louis Branch Office

The Missouri Secretary of State's Office, Secretary of State John R. Ashcroft, offers a variety of information useful to business owners. The Secretary of State's office provides the necessary information and forms to register a business in the state as well as information pertinent to corporations, LLCs and sole proprietorships.

MU Office of Technology Management & Industry Relations

The Office of Technology Management & Industry Relations at MU serves the public good by bringing university innovations to the marketplace, where research truly benefits society. We do this in partnership with companies, entrepreneurs and investors.

Nodaway County Economic Development

Nodaway County Economic Development provides services to the businesses and communities of Nodaway County. NCED manages two low interest / no interest revolving loan funds to assist startup businesses with equipment and building improvements.

Nonprofit Missouri

Nonprofit Missouri provides professional development, advocacy and research to Missouri's nonprofit sector.

North Central Missouri Business Facilitation

To facilitate entrepreneurial development in the north central Missouri counties of Caldwell, Clinton, Daviess, DeKalb, Grundy, and Harrison.

Northwest Missouri Regional Council of Governments

A regional organization offering a variety of programming, products and services to member governments in Atchison, Holt, Gentry, Nodaway and Worth counties in northwest Missouri.

OPO Startups

OPO Startups is a place where startups, freelancers, remote workers, & small businesses can have meetings, work & collaborate.

Ozark Foothills Business Incubator

The Ozark Foothills Development Association owns and operates an industrial business incubator for new and expanding businesses - low cost rental space from 2300-5000 sqft.

Park Hills Community Development

Park Hills Community Development guides businesses and new entrepreneurs to sustainable success in the local market. We cover all aspects of development from the smallest building project up to multi million dollar projects

Pioneer Trails Regional Planning Commission

Pioneer Trails Regional Planning Commission provides comprehensive planning, land use planning, mapping services, grant writing, project development, environmental services and transportation analysis.

SBA Small Business Procurement Program - Kansas City

The Small Business Procurement Program of the SBA works to ensure that federal agencies meet their goals of doing business with small businesses.

Sling Health

Sling Health is a non-profit healthcare accelerator that provides resources, training, and mentorship to interdisciplinary teams to develop and commercialize solutions to clinical problems discovered by healthcare providers.

Square One Small Business Services by Mid-Continent Public Library

Square One Small Business Services at Mid-Continent Public Library supports local entrepreneurs through access to information, programs, and opportunities. Whether owning a business is a brand new dream or your life’s work, MCPL is committed to helping you succeed.

St. Louis Economic Development Partnership

The St. Louis Economic Development Partnership seeks to facilitate the development of long-term, diversified business and employment opportunities in St. Louis City and County and the St. Louis region.

St. Louis Public Library

St. Louis Public Library's 16 locations, including Central Library's subject specialists, help entrepreneurs find information related to day-to-day operations and long-term needs using a wide variety of resources.

St. Louis University School of Law Entrepreneurship and Community Development Clinic

The ECD Clinic provides transactional representation to entrepreneurs, nonprofits, community groups, and small businesses.

St. Louis Volunteer Lawyers and Accountants for the Arts

St. Louis Volunteer Lawyers and Accountants provides free legal and accounting assistance and offers a wide variety of affordable educational programs.

The LearningForce

The LearningForce offers a diverse schedule of noncredit continuing education courses for personal enrichment, professional development and workforce training solutions for business, industry and the individual.


A collaborative effort between several economic development agencies based in St. Louis, Missouri, T-REX is a nonprofit technology incubator, co-working space and innovation conference center, designed to attract talent, create jobs and build density in downtown St. Louis.

U.S. Department of Commerce/U.S. Commercial Service, St. Louis Export Assistance Center

The U.S. Department of Commerce U.S. Commercial Service provides export assistance to U.S. businesses in MO with 51% U.S. content goods and services. We serve MO (excluding Kansas City and surrounding counties) and St. Louis metro east in IL.

UMSL Accelerate - University of Missouri-St. Louis

UMSL Accelerate is the innovation and entrepreneurial resource for students, faculty and the community. Our vision is to serve as a catalyst for developing our students, faculty and community to inspire entrepreneurship and innovation. Our mission is to foster a community of thought leaders by providing a vibrant ecosystem to Educate (curriculum), Innovate (co-curriculum), and Collaborate (community programming).

University of Missouri - Kansas City - Office of Technology Commercialization

The Office of Technology Commercialization at UMKC helps UMKC researchers share their discoveries with the world.

University of Missouri - School of Law - Center for Intellectual Property & Entrepreneurship (CIPE)

The Center for Intellectual Property & Entrepreneurship (CIPE) is comprised of nearly a dozen faculty members at Mizzou's law school. The center's faculty are thought leaders in the area of law and innovation. CIPE hosts an annual symposium.

University of Missouri - School of Law - Entrepreneurship Legal Clinic (ELC)

The Entrepreneurship Legal Clinic (ELC) provides legal assistance to take startups from concept to capitalization. The ELC is a course where upper level law students get hands-on experience under the supervision of an experienced, licensed attorney.

University of Missouri Extension of Miller County

Extension programs include Agriculture and Environment, Youth and Family, Health and Safety and Business and Community. Our Ag Business Specialist and 4H specialists are available to answer questions from 8-4 Monday through Thursday.

University of Missouri-Kansas City - Interdisciplinary Initiatives - Law, Technology & Public Policy Course

Interdisciplinary projects-based course for the creation and refinement of prototypes of new technologies or technology-assisted solutions to social and civic entrepreneurship challenges. Assigns projects submitted to course by local government, community organizations, and/or faculty, for advancement by mentored student teams.

University of Missouri-Kansas City--Interdisciplinary Entrepreneurship

Entrepreneurship & New Venture Creation is a projects-based course in which interdisciplinary teams of Law, MBA, Engineering and sometimes other students collaborate on the development of a business plan for a startup venture. The innovation the student teams work with are brought to the course by Project Providers who "pitch" their innovations to the students and faculty.

University of Missouri–St. Louis - Technology Commercialization & Economic Development

The UMSL Technology Transfer Office helps faculty, staff and students commercialize their research discoveries and creative works through licensing to established companies or new ventures and guiding UMSL entrepreneurs in creating new ventures.

Veterans Business Resource Center

Free assistance to honorably discharged veterans, transitioning military and military families with preparations to self-employment or business expansion.
Remember if you need help, give us a call at 866-870-6500 or send us a message. We can guide you through the next steps you need to take to start your business.

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