What is a business entity?
Its an organization founded by one or more natural persons to facilitate specific business activities or to allow its owners to engage in a trade.
Basically it is how you are identified as a business. The most common are the following 3:
Business Entities
Sole Proprietor- a business owned and run by one person and in
which there is no legal distinction between the owner and the business entity.
The owner is personally liable for the debts and liabilities of the business.
Limited Liability Company (LLC) - It is a business
structure that can combine the pass-through taxation of a partnership or sole
proprietorship with the limited liability of a corporation. An LLC is not a
corporation under state law; it is a legal form of a company that provides
limited liability to its owners in many jurisdictions. If an LLC is formed and
operated properly, the owners can be protected from such liability. Meaning if
sued, your personal accounts and assets are protected.
Partnership- partnership is an arrangement where parties, known as
business partners, agree to cooperate to advance their mutual interests. The
partners in a partnership may be individuals, businesses, interest-based
organizations, schools, governments or combinations. Organizations may partner
to increase the likelihood of each achieving their mission and to amplify their
reach. The owners are personally liable for the debts and liabilities of the
business.
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