There are many ways you can conduct business. Depending on the actions you take, what might be legally recognized by your state might not be recognized by the IRS, and vice-versa.
For instance, a state may recognize the following entities: sole proprietorship, partnership, limited-liability partnership, limited partnership, limited liability company, or a corporation. The IRS, on the other hand, tends to treat all partnerships and LLCs like partnerships, and single-member LLCs like a sole proprietorship. The many options you have as a business can often be distilled down to a choice few, depending on your goals and expected revenues.
Carson Law Firm knows the right questions to ask, and can help guide you through this process while keeping costs down.