Choosing the right business structure
A sole proprietorship is the simplest form of business structure, where a single individual owns and operates the business, with no legal separation between the business and the owner. The owner is personally liable for all business debts and obligations, but also entitled to all profits.
A partnership is the relationship between two or more people to do trade or business. Each person contributes money, property, labor or skill, and shares in the profits and losses of the business.
A corporation is a legal entity separate from its owners, often called shareholders, that is formed under state law. It can be a for-profit entity, aiming to generate revenues and returns for shareholders, or a non-profit organization with different purposes.
A Limited Liability Company (LLC) is a business structure allowed by state statute that may offer liability protection and management flexibility.
A corporation with pass-through taxation, meaning profits and losses go directly to shareholders, avoiding double taxation while maintaining liability protection.
