Entity Types
Selecting the right entity for your small business is a critical decision as it affects your legal and tax obligations. There are several entity types to choose from, which include sole proprietorships, partnerships, limited liability companies (LLCs), and corporations.
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Ultimately, the entity type you choose will depend on your specific business needs, goals, and circumstances.
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It is important to consult with a qualified attorney or accountant before making your selection to ensure that you are properly protected and comply with all legal requirements.
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Sole Proprietorship
The sole proprietorship is the simplest, "unincorporated" default structure for a business owned by a single individual. You are automatically considered a sole proprietor if you conduct business activities but do not register as a formal entity with the state. In this model, the law makes no distinction between the owner and the business.
Partnerships
Partnerships are the simplest structure for two or more people to own a business together. They are frequently used by professional groups or entrepreneurs testing a shared business concept before committing to more complex structures. These include General Partnerships (GP) Limited Partnerships (LP) and Limited Liability Partnerships (LLP).
