The type of business entity you choose to start has legal & financial implications. Two of the most commonly asked about topics with legal implications are: 1. Ownership & control of the business: Sole Proprietorship: As a sole proprietor you have 100% control & ownership of the business. Married couple as a Sole Proprietorship: If you are in a community property state you jointly have 100% control & ownership of the business - like a joint checking account. If you are not in a community property state this type of business formation may not be allowed - if it is, check with your state's laws on how ownership is divided ​ General Partnership: Unless you have a contract saying otherwise you each own 50% of the business and share control of the business equally. 2. Personal liability of the owner: Sole Proprietorship: As a sole proprietor you are 100% personally liable for the activities of your business. Insurance can help reduce what you may have to pay out if there is a situation, but you own the liability. Married couple as a Sole Proprietorship: If you are in a community property state you jointly have 100% of the liability for business activities. If you are not in a community property state this type of business formation may not be allowed - if it is, check with your state's laws on liability General Partnership: Unless you have a contract saying otherwise you each jointly share 100% of the liability for business activities. Yes, even though you only each own 50% of the company.