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Choose your business structure

Who is this article for?
  • Only account owners can select a business structure.
  • Last updated: July 2024

    About business structures

    The information we request from you when you set up your Square account can vary depending on the business structure you run. The information below will help you understand the options to choose from when you get started with Square.

    Before you begin

    Choosing your business structure is part of setting up your Square account. Learn more about signing up for Square in our Set up your Square account.

    Please note that this guidance is general in nature and does not constitute legal, tax or any other type of professional advice.

    Types of business structure

    Individual/Sole proprietorship

    A sole proprietorship is an unincorporated business owned exclusively by one person. In a sole proprietorship, the business owner is the business. If you’re running a small business on your own, you can establish your business as a sole proprietorship. Being a sole proprietor doesn’t prevent you from hiring other people — sole proprietorships can have employees.

    In order to pay employees as a sole proprietor, you’ll need an Employer Identification Number (EIN). Learn how to obtain an EIN from the U.S. Small Business Administration website.

    Limited liability company

    A limited liability company (LLC) is a private business structure that combines features of a corporation and a partnership.

    An LLC can be owned by just one person or by several individuals (typically called “members”) as well as other businesses. Learn more about the limited liability company business structure on the IRS website.

    Private company

    A private company (or privately held company) is a business with shares that are not traded on the stock market or issued through an initial public offering (IPO) or stock launch. The company stocks are owned and traded between shareholders privately.

    Public company

    Public companies can be listed or unlisted. Listed companies are registered on the stock exchange and their shares are traded openly. Unlisted public companies are firms with shares that aren’t listed on a stock exchange.

    Charities and Nonprofits

    Square supports charitable organizations that have been granted tax-exempt status by the IRS under under the Internal Revenue Code section 501(c)(3). Charitable organizations may include:

    • Charitable and religious organizations
    • Private foundations
    • Other nonprofits

    Find out more about charities and nonprofit organizations, and learn how to apply for tax-exempt status on the IRS website. Check your state government website to learn about state exemptions.

    Partnership

    A partnership is established between two or more individuals to do business. Partners share profits or losses, resources, and risks. Partners can be individuals, other businesses, or public organizations. Generally, there are two types of partnerships: general partnerships and limited partnerships.

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