Types of Business Structures

Types of Business Structures Limited Liability Company Corporation Partnership Sole Proprietorship

Limited Liability Company A LLC is a fairly new business structure, but most states and nations accept the format. The main asset of a LLC is the limited liability which means if sued only business assets can be contested for. A LLC is also has tax advantages as you can file as a corporation or as a member LLC and pay tax on your percentage of the profits.

Corporation A corporation is the oldest and most common formation of business structure. Corporation have two sizes, a full corporation, or s-corp status. The standards on corporation are higher then other business ventures. Corporate taxation is harder and more regulated, you may have to pay quarterly estimated tax.

Partnership A Partnership is a business venture that is placed between two or more people invested in a company. A partnership can be a LLC and Corporation. Taxes can be paid on a percentage of ownership basis.

Sole Proprietorship This format of business has little corporate structure, but has risk. If the operation is sued or has debts, personal assets are at risk as well as business assets. All profits from the business will be taxed as personal income and not business income.