Find your Business structure

Apr 6

Most Common Business Structures

A sole proprietorship is an unincorporated business with only one owner who pays personal income tax on profits earned.
Business assets and liabilities are not separate from your personal assets and liabilities. You can be held personally liable for the debts and obligations of the business.
Sole proprietorships can be a good choice for owners who want to test their business idea before forming a more formal business.

A partnership is a legal arrangement where two or more people share ownership of a business.
There are two common kinds of partnerships: limited partnerships (LP) and limited liability partnerships (LLP). Limited partnerships have only one general partner with unlimited liability, and all other partners have limited liability. Limited liability partnerships are similar to limited partnerships, but give limited liability to every owner.
Common partnership business examples include law firms, physician groups, real estate investment firms and accounting groups

A limited liability company (LLC) is a business structure that protects its owners from personal responsibility for its debts or liabilities.
An LLC lets you take advantage of the benefits of both the corporation and partnership business structures. Profits and losses can get passed through to your personal income without facing corporate taxes.
Owners of an LLC are called members. Members may include individuals, corporations, other LLCs and foreign entities.

A corporation is a legal entity that is separate from its owners, created by individuals, stockholders, or shareholders. Corporations offer the strongest protection to its owners from personal liability.
A corporation can be formed as a for-profit or a not-for-profit entity. Majority of corporations are for profit, formed to generate revenue.
Non-profit corporations operate as charitable organizations, dedicated to a particular social cause such as religion or education.

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