How do various forms of business operate?
There are several types of business entities available to entrepreneurs and business owners. Each form has legal and tax benefits and consequences. To learn about the business entities available in your state and which would best serve your goals, consult an experienced business attorney. The following is basic information on how various business entities operate: Sole Proprietorship. In a sole proprietorship, one owner controls the business and assets. A sole proprietorship is not taxed separately from the owner. The owner declares the business income or loss on the owner’s personal income tax return (often referred to as pass-through taxation). The business owner is personally liable for all of the business’s debts and obligations. General Partnership. In a general partnership, two or more persons agree to operate a business together for profit. Each partner has the power to make contracts on behalf of the partnership and these contracts are binding on all of the partners, even if th
