Business Structures – Overview

A sole proprietorship is the easiest way to start your business, however, it is the riskiest type of business formation since the proprietor has unlimited liability. A sole proprietorship is not corporated and does not have the same protection as corporations, however, it is easier for tax purposes.

The business owner of a sole proprietorship becomes responsible for the business's expenses, debts, and even lawsuits if such should arise. Did I mention the business owner of a sole proprietorship is PERSONALLY responsible? This means that your personal bank accounts, assets, investments, and wages are at risk.

Unlike a corporation, there is no legal separation between personal assets and business assets. If the business owner neglects to pay off a business loan or other obligations, creditors may have the right to help themselves to assets, personal or business, for payment.

If you are starting a business or thinking of starting one, consider forming a limited liability company to protect you and your personal assets. If you already have a sole proprietorship, it's not too late!

Stay tuned for a comprehensive list of different types of limited liability companies and corporations.

The Types

Types of Limited Liability Companies:
General Partnership
Limited Partnership
Limited Liability Partnership
Limited Liability Limited Partnership
Family Limited Partnership

Types of Corporations:
C Corporation
S Corporation
Nonprofit Corporation
Professional Corporations
Limited Liability Company
Joint Venture

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