When you decide to start a small business you will need to make several decisions that may affect the success and functionality. This paper explains the following types of small businesses and the differences in each. Remember, when you form a business you are likely to need the services of an attorney, accountant, insurance agent and others. Among the business forms are a sole proprietorship, corporation, partnership or limited liability company.
Ownership is easily transferable via stock transfers.
Limited liability means shareholders will usually not be liable for corporate debts or litigation. A Subchapter S corporation is the most common form of corporation for small businesses because income flows through to the shareholders similar to a partnership. Corporations in General A Corporation is a separate legal entity created and regulated by state laws. The many advantages of incorporation flow from this distinction between the business and the people who own it. The corporation is responsible for its own debts.