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Types of business structures, and its importance

choosing the best business structures for your company is not very hard you just need to understand the types of every structure and see if it suits you or not there are many types of business structures, each with advantages and disadvantages. Your choice is very important and it can affect the way you run your business.

The most common types of business structures are sole proprietorship, partnership, corporation, and S corporation, and more recent development to these types of is the limited liability company (LLC) and the limited liability partnership (LLP).

Business structures type comes with a different amount of tax, you will want to make your selection wisely and choose the structure that most closely matches your business’s needs.

Types of business structures

-Corporation
Law considers these kinds of companies as an entity separate from its owners. It has its own legal rights, independent of its owners, and sell the rights of ownership in the form of stocks. There are types of corporations including C corporations, S corporations, B corporations, closed corporations, and nonprofit corporations.

-Cooperative
This type of business structures, the company is owned by the people it serves. It benefits the company’s members, who vote on the organization’s mission and direction.

-Sole proprietorship
A sole proprietorship is a simple type of structure With a sole proprietorship, one person is responsible for all of a company’s profits and debts. If you want to be your own boss and run a business from home without a physical storefront, a sole proprietorship allows you to be in complete control. You will be the boss of your self, isn’t that cool!

-Partnership
This structure is owned by two or more individuals. There are two types: general partnerships, where all is shared equally; and limited partnerships, where only one partner has control of its operation. This structure is suitable for anyone who wants to go into business with a family, friend or business partner, like running a Cafe or agency together.

-Limited liability company (LLC)
Limited liability hybrid structure that allows owners, partners or shareholders to limit their personal liabilities while enjoying the tax and flexibility benefits of a partnership. Under an LLC, members are protected from personal liability for the debts of the business, as long as it cannot be proven that they have acted in an illegal, unethical or irresponsible manner in carrying out the activities of the business.

Well, these were the types of business structures, hope you find a suitable structure for you.

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