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Six Legal Forms of Business

When identifying an appropriate legal form of business, most often entrepreneurs consider these factors—control, taxes, liability, transferability of ownership, longevity of the business, and raising capital. The key is to identify the legal structure that best meets your needs and the needs of your business.

In an ideal world, you would select a legal form of business, understanding every legal and tax implication. The reality is that you must rely on the advice of attorneys and accountants to help you make this decision. They can anticipate your concerns based on their experience and on information you provide. Still, the legal structure of the business is your decision to make and live with.

The six legal forms of doing business are:

  • Sole proprietorship
  • Partnership
  • Corporation
  • S corporation
  • Limited liability company (LLC)
  • Nonprofit

This article will delve deeper into the characteristics, advantages, and disadvantages of each structure.

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