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I’m opening a business. What are the different types of business structures?

April 26, 2017Business different I’m opening structures types

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I’m opening a business. What are the different types of business structures?

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The simplest business form is a sole proprietorship. The owner is the individual. There are no documents to file, and the owner can report the profits or losses on their personal tax return. The owner is personally liable for the business. If there is more than one owner it is a partnership, with voting and distribution of profits and losses determined by percentage of ownership. A corporation is a formal business structure, and is a “person” in the eyes of the law. The owners are not personally liable for the acts of the company. Articles of incorporation are filed with a state, stock is issued and officers are elected. A limited liability company (LLC) is a hybrid organization, blending corporate and partnership traits. In broad terms, it provides corporate limited liability protection for the owners, with the tax and management characteristics of a partnership.