Final answer:
The business entity is set up with state authorities, and for tax purposes, with the IRS. The SEC, FDIC, and SBA do not handle the establishment of business entities. Consulting with professionals when choosing a business structure is advisable.
Step-by-step explanation:
When setting up a business entity, you typically register with state authorities where your business will operate, not directly with federal agencies at first. However, for tax purposes, you work with the Internal Revenue Service (IRS), which is responsible for collecting taxes and enforcing tax laws. Therefore, the answer to the question "With whom do you set up your business entity?" is a. IRS. The Securities and Exchange Commission (SEC) handles the regulation of securities markets, the Federal Deposit Insurance Corporation (FDIC) insures bank deposits, and the Small Business Administration (SBA) supports small businesses but is not the agency with which one establishes a business entity.
When deciding on the form of business, such as sole proprietorship, partnership, corporation, S corporation, or Limited Liability Company (LLC), it's important to understand the implication of each type as it affects your tax obligations. The larger the profit, the higher the potential tax burden will be. When starting your business, consulting with a business attorney or accountant is beneficial to ensure that you are selecting the most advantageous structure for your situation.