Limited liability companies create a separate legal entity that can bear at least some of the liability for debt and legal action, reducing or eliminating the liability faced by the business owner or owners.The business structure is similar to a corporation, yet the business itself is much less structured than a full corporation and provides the owners with the same sort of flexibility that one sees with a general partnership.If the sole proprietorship is operated under your name, the new operator would have to either use his name or file a business name with the appropriate local government.
Once you learn more about these different types of business entities, the best option for you and your business should become clear.
Though you may have heard about a number of different types of ownership when researching business options, there are only four primary types that you'll likely have to consider: sole proprietorships, partnerships, limited liability companies and corporations.
Contracts between the partners may shift the liability to certain members within the partnership, but there is no way to shift the liability to the business itself.
Other forms of partnerships exist, though they are less common than general partnerships.
Joint ventures are another form of partnership, though they are typically created with a specific goal or a limited time frame in mind instead of being created to operate indefinitely.
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There are a few other forms of partnerships available as options as well, though these are typically reserved for special cases or are only open to certain professions or operating styles.
It typically takes the form of a single individual in business as the sole owner of the company.
In many cases, the owner of the sole proprietorship is also the only employee as well, though this doesn't have to be the case.
This may leave you wondering which is the best entity type for your business or even asking, "What are different types of business ownership?
" It can be very confusing if you aren't familiar with the different types of ownership and the advantages or disadvantages of each.