Question

What type of legal entity does your business operate under? What special privileges does that grant it?

Answer 1

Entrepreneurs beginning another business have a ton of choices accessible to them when choosing which sort of business structure is best for their new organization. There are huge advantages and certain downsides related with each of the different sorts of lawful elements that a business visionary can pick the perfect business structure for their organization. In this way, it is basic to comprehend the different parts of these distinctive lawful elements and whether they may work for your organization or not.

Limited Liability Companies: (LLCs)

- This type of entity has the separate legal structure which is independent of its owners.
- In this type, the personal assets are not involved in the business debts.
- The taxes in this form are same as the sole proprietorship. 
- There is not limit to the number of owners.
- This business type is governed by operating agreements.

C Corporations:

- The legal and tax structures are separate from their owners.
- In this type, the personal assets are separate from the business debts.
- There is no limit to the number of shareholders in the company. 
- There should be annual meetings.

S Corporation:

- The legal and tax structures are separate from their owners.
- In this type, the personal assets are separate from the business debts.
- The owners are supposed to report their profits and losses to the company. 
- There are a limited number of shareholders.
- There should be annual meetings.

Partnerships: 

- Partners are equally responsible for any debt and loss.
- This one is easy to form and operate.
- The owners are supposed to report their profits and losses to the company.

Sole Proprietorship:

- The owner himself is responsible for all the debts and losses.
- There is no need for the state filing.
- This one is easy to form and operate.
- Owner report all the taxes to his own personal tax return.