Typically, a business can be organized as a disregarded entity, partnership, C corporation, or S corporation. Each entity choice will have different tax benefits and tax costs, so it is important to understand how those tax benefits and costs will impact your client and how you can use your client's business structure to meet its needs and priorities.
For example, if your client is a smaller, new business where the founders will be primarily providing the labor and the business won't be profitable for a while, what tax entity will be the best fit? Does your client need flexibility in how its profits and losses are distributed to the founders? What tax entity will minimize self-employment tax? These questions, and more, are important to think about when advising your client on entity choice.