Your start-up business is taking off. In fact, you just got your first check.

Now, you need to get that money in the bank.

You don't have a business bank account? How are you going to cash that check?

In order to open a business bank account, you need to have your business license showing your trade name, your Federal Employer Identification Number, and your Certificate of Incorporation for a corporation, or Certificate of Formation for your LLC, or your partnership agreement for a partnership.

If you don't have these already, it's probably because you are still trying to figure out what type of entity you should form for your new business.

Unfortunately, it's not always easy to figure out which entity type is best. Should you be a sole proprietorship, partnership, LLC, S-Corporation or C- Corporation?

What's worse, you may be best off starting as one entity type, then changing when your business grows or gets more profitable.

If you've never gone through an entity change, I'm warning you now that the process can be a bit painful. You have to open new bank accounts, get a new Federal EIN, make sure your payroll tax deposits are made to the right account, change your 1099 information with all your customers, etc. If you change mid-year, you could end up filing multiple payroll and income tax returns, too.

Forming an LLC is one way to keep this process as simple as possible.

You see, an LLC is not a recognized tax entity. It is a legal business type, but the type of tax return your LLC files varies by the number of members and can even change with a simple election or two with the IRS. Since an LLC can choose which type of tax return to file, you can choose or change your tax type, without having to change your legal setup or Federal EIN. This can be a major time saver for your business.

Let's go through your options.

If you form a single member LLC (only one owner), the IRS default is that this is a disregarded entity. Essentially, the IRS ignores the fact that you formed a separate legal entity for tax purposes, and you report your business activity on Schedule C of your individual income tax return. You file and pay taxes just like a sole-proprietorship.

If you form a multi-member LLC (more than one owner), then the IRS tax default is a partnership. Your LLC would file a partnership tax return, and the income or loss would flow through to the individual owners' tax returns. The partnership return allows you to distribute income or losses to partners (members) based on criteria other than ownership percentages. This can be useful if you have members in different tax brackets, or if you would like to be able to distribute start-up losses to the member who invested the most money in the business.

If you would like to have your LLC file a different tax form, you can use Form 8832, Entity Classification Election http://www.irs.gov/pub/irs-pdf/f8832.pdf to choose how you would like to be taxed. Using this form, you can have your LLC elect to file a C-Corporation or S-Corporation tax return.

If you would like to change from the default entity type, you should file the election within 75 days of forming your LLC. You also cannot file the election more than once every 60 months, unless the first time it was filed was during the initial formation of your business. If you want to be taxed as an S-Corporation, you also need to file Form 2553, Election by a Small Business Corporation http://www.irs.gov/pub/irs- pdf/f2553.pdf within two and one-half months of forming your LLC.

With an S-Corporation, the income from your business is taxed on the individual member's tax returns based on their ownership percentage, and members pay payroll taxes on their wages just like any other employee. A C-Corporation pays taxes on its income separately, but individual members also pay taxes any wages and dividends they receive from the corporation.

Corporations are required to keep corporate minutes, must file an annual report, and must have an annual shareholder meeting in order to maintain legal limited liability. The legal requirements for maintaining an LLC can be much simpler. It's a good idea to consult a business attorney in your state to make sure your business is on track with your state requirements.

If you are in a rush to get your business rolling, starting an LLC could keep your options open. You can get your business started right away, and still have time to consult an accountant before you make a final decision on how you want to be taxed. You can even change your mind down the road, without having to change all your business accounts.

Don't forgo professional advice, but consider the LLC if you need more time. That way, you can spend your time building your business, rather than filling out more paperwork!