The most common forms of business are the sole proprietorship, the limited company and the S corporation, sole proprietorships, public limited companies, public limited companies and limited liability companies (LLC). The most common types of business entities are sole proprietorships, partnerships, limited liability companies, corporations and cooperatives. Here you can find more information on each type of legal structure. Individual owners include professionals, service providers, and retailers who operate on their own account.
While a sole proprietorship is not a legal entity separate from its owner, it is an independent entity for accounting purposes. The financial activities of the company (for example, limited partnerships) limit the personal liability of individual partners for the company's debts depending on the amount they have invested. Members must submit a limited partnership certificate to state authorities. An LLC is a hybrid between a partnership and a corporation.
Members of an LLC have operational flexibility and income benefits similar to those of a corporation, but they also have limited exposure to liability. While this seems very similar to a limited partnership, there are significant legal and statutory differences. It is recommended to consult with an attorney to determine the best entity. The law considers a corporation to be independent of its owners, with legal rights independent of its owners.
The structure is typical among accounting, tax and law firms, but other types of companies also declare themselves as LLCs. Depending on the type of business and its activities, you may need a license at the local, state, and federal levels. A corporation is a legal entity that operates under state law, whose scope of activity and name are restricted by its statutes. There are several types of corporations, including C corporations, S corporations, B corporations, closed corporations, and non-profit corporations.
A business legal structure, also known as a business entity, is a government classification that regulates certain aspects of your business.