Essay about The Legal Structure Of Business
Your choice of structure can greatly affect the way you run your business, impacting everything from liability and taxes, to control over the company. The key is to figure out which type of entity gives your business the most advantages when it comes to helping you to achieve your organizational and personal financial goals.
Types of business entities
1. Sole proprietorship
This is the simplest form of business entity, and it is used by more than 70 percent of businesses in the United States, according to the Small Business Administration. With sole proprietorship, one person is responsible for all of a company 's profits and debts.
This entity is owned by two or more individuals. There are two types: general partnerships, where all is shared equally; and limited partnerships, where only one partner has control of its operation, while the other person or persons simply contribute to and receive only part of the profit. Partnerships carry a dual status as a sole proprietorship or limited liability partnership (LLP), depending on the entity 's funding and liability structure.
3. Limited liability company (LLC)
A limited liability company is a hybrid structure that allows…