Different Business Legal Entities for Entrepreneurs

Different Business Legal Entities for Entrepreneurs cover photo for Millennial Investments

There are several types of business legal entities, including:

  1. Sole Proprietorship: A business owned and run by a single person, with no distinction between the owner and the business.

  2. Partnership: A business owned and run by two or more individuals, who share profits and losses.

  3. Limited Liability Company (LLC): A hybrid type of business structure that combines the liability protection of a corporation with the tax benefits of a partnership.

  4. Corporation: A legal entity separate from its owners, with limited liability for shareholders and the ability to issue stocks.

  5. S Corporation: A type of corporation that elects to pass corporate income, deductions, and credits through to shareholders for federal tax purposes.

  6. Cooperative: A business owned and controlled by its members, who share in the profits and losses.

  7. Non-Profit Organization: A business structured to serve a specific purpose other than generating profit, and may be eligible for tax-exempt status.

It is important to choose the right business entity based on the nature of the business, the size and number of owners, and the goals of the owners. An attorney or a tax professional can provide advice on which type of entity is best for a particular situation.

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