A business is defined according to the Law of the United States as an individual, corporation, partnership, organization, joint venture, government agency, or a public corporation. The term “enterprise” is used to describe an organized process for conducting business affairs and includes all the partners involved in such an enterprise. In contrast, the word “individual” refers to any member of a permitted group which exercises power, authority, and independence separate from other members. All businesses are classified into two categories: business enterprises and non-business enterprises. Business enterprises are organizations conducting commerce and trade and non-business enterprises are those which do not carry on commerce and trade.
An important feature of a business concern is its ability to make profits. It therefore becomes imperative for a business concern to choose the proper form for its incorporation, i.e. a sole proprietorship, partnership, limited liability company (LLC), corporation, partnership, or a limited liability partnership (LLP).
A sole proprietorship or a general partnership renders the assets of one partner completely owned by the other. Consequently, a number of different types of enterprises exist, the operation of which is entirely dependent upon the operation of the other partner. Examples of such partnerships are general partnerships and limited liability partnerships. Limited liability partnerships (LLPs) and corporations both entail specific legal rights and responsibilities.
A corporation is a legal body organized by the law in order to undertake different activities for the benefit of the public. It possesses certain characteristics of a partnership in that it is incorporated for the benefit of all its shareholders. Unlike a partnership, there is only one shareholder. A corporation is distinct from a partnership in that it carries on business for profit. A corporation also cannot have any share ownership. A corporation may, however, establish any type of corporation limited by a law that limits the number of shares that can be owned by a majority of the shareholders.
A general partnership is distinguished from a corporation by the fact that its shares are not transferable between the partners. This characteristic allows partners to control the distribution of their profits. Distributions are normally made according to the discretion of the partners. If a corporation is incorporated, it assumes the name of its owners and becomes a corporation. The profits of the corporation are then shared out between all its shareholders according to a set formula.
A corporation may adopt different names in order to evade any resemblance to the initials of its partners. It may also utilize certain symbols, like the golden eagle, or elvish symbols. The main objective of a partnership is the same as that of a corporation: It combines the advantages of the two by means of direct and indirect transactions that allow profits and losses to be shared. The main difference between a corporation and a partnership is that profits and debts of a business are separated, with the corporation passing its debts to its partners and the partners paying them to the corporation.
Some people believe that they are running their businesses as a sole proprietorship. This is often referred to as a “C” corporation, for the corporation and sole proprietorship. In a sole proprietorship, there is only one owner, whereas in a partnership the partners share in the profits. Other people refer to it as a C-BD, for business owned and controlled. The main difference between these two concepts is that a sole proprietorship can exist for only a single year, while a C-BD is valid for as long as the business is running.
There are many types of businesses. Each has its own advantages and disadvantages. Some businesses are more appealing than others due to the special qualities that it possesses. Most people prefer sole proprietor businesses over partnerships and C-BDs because they are easier to open, require lesser taxes, require less paperwork and have lower start-up costs. Solos are also safer businesses to begin since you do not yet have much of an existing community of customers or employees. There are many other things to consider when starting your own business, but if you choose to go with a sole proprietorship or partnership, then you must make sure to carefully consider all the ramifications and decide if it is right for you and your family.