An appropriate legal structure of a business can allow you practice the trade without any worries. There are different types of legal structures available today. But, choosing the right one will depend on many factors. One of them is the type of business. What type of business are you into, Is it a sole proprietorship? Partnership business or joint venture? Each one of them as different pieces of legal structures.
Types of business with legal structure
Sole proprietorship business
Here the entire business is controlled by a single person. He is responsible for losses and will enjoy entire profit alone. He is the decision maker who abides with all legal structures alone.
Limited liability company (LLC)
This type of business is shared among the shareholders, owners and partners. They all can put a limitation over their personal liability. They enjoy enough flexibility in business and tax benefits. As compared to the sole proprietorship business, this one offers wider protection. Even the separation to business is more.
Here, two or more individuals agrees to share profit and loss of a business. This is further divided into two sub division. One is called the limited partnership and the other is stated as general partnership. In general partnership everything is divided equally. But, in limited partnership, only a single partner acts active and have control over everything.
According to law of business or legal structure, the cooperation is the name of an entity which is separate from owner. This has independence of owner with the ownership of legal rights. The cooperation are also many in types. Those are B corporation, C corporations, S corporations, closed corporations.
The legal structure of the business can be stated in cooperatives also. There are many more factors such as liability, taxes, flexibility, control as well as the capital investment.