Business Entities 101: The Basic Types and Structures

business basics

Corporation. It’s a word we’ve all heard many times. But, often, “corporation” is used as a substitute for “business entity.” This leads to confusion among many who aren’t involved in the business world. In fact, “corporation” is only one type of business entity.

The primary reason that many business owners use a corporation, limited liability company, or other business entity is to protect their personal assets from business debts and creditors. When a business entity is created, structured, and used properly, a business owner can limit the risk to money she’s invested and left in the business entity.

Unfortunately, it can be difficult to decide which business entity is right for you. First off, there’s literally an alphabet soup of different business entities you can choose from: GP, PC, LP, LLP, LLLP, LLC, PLLC, and Inc., to name a few.

Second, the differences in taxation, corporate structure, or compliance rules between these business entities range from minor to meteoric, and to the uninitiated, deciphering these differences can be a Sisyphean task.

Despite the difficulty, being able to differentiate between the various business entities is a must for any entrepreneur.

To help you decide which business entity is right for you, we’ve put together this simple infographic.

types of business entities

 

Don't Sweat the Small Stuff

Corporate governance, meetings, and state filings can eat up a lot of your precious time. But missing these deadlines can wreck your business and destroy your liability shield!

Our Corporate Veil Program relieves your legal burden so you can focus on running your business. 

Consistent and Reliable Legal Advice

Here at Alexander Abramson, we focus exclusively on business-related legal matters. Our attorneys have advised business owners and entrepreneurs on corporate governance issues, shareholders and operating agreements, and succession planning for decades. 

We would love to speak with you directly about how we can help you start, grow, and protect your business. Call us at 407-649-7777 or email a team member to get started.

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