Legal Forms of Business

Business comes in many different forms. It comes as a sole proprietorship, partnership, limited liability partnership, limited liability company, S corporation, a franchise, and corporate form. Each form of businesses has its advantages and disadvantages. It’s up to the entrepreneur to choose which type of business he wants to run. Here are some examples of what each form of business would be used at.
As its name implies, this form of business is an option only for a business with one owner. Health insurance premiums paid by proprietors and other self-employed people are fully deductible. Another advantage is that a sole proprietorship can be switched to a different structure if future tax reform alters your tax advantage. The low cost is very unique in sole proprietorships. A profession where sole proprietorship would be used would be Internet retail. One individual can operate an Internet retail job. The one employee would be obligated to fulfill orders, manage, and provide the service. The World Wide Web can handle anything else automatically such as order tracking and inventory.
A business partnership is when two owners run a business. Both owners have a hand in running the operation. The only problem with this is that both owners are held liable for the business debts. A creditor can sue either owner over unpaid debt. A profession where a business partnership can be used would be a daycare. Two people can co-own a daycare. This would be good with a person who has a business background and a person who has a daycare background. The business would thrive with one person over seeing the day-to-day operations and the other monitoring the revenue.
A limited liability partnership is when some partners have less financial liability than other partners in the business. It reminds me of shareholders to a corporation. Although the financial liability is limited, each partner has the right to run the business as he or she fits. A profession where a limited...