Types Of Business

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1. Sole proprietorship: This is typically the simplest type of business, with only a single person or a married couple responsible for all the company's profits and debts. If you intend to work alone, this may be the best option for you. This type of business can be especially appealing because income and expenses appear on your personal income tax record.

2. Partnership: A partnership can be an ideal choice if your business is going to be owned and operated by multiple people. This type of business comes in two forms: general partnerships and limited partnerships.

3. Limited liability company (LLC): This type of company allows owners, partners and shareholders to limit their personal liability in order to protect their personal assets. An LLC is not incorporated but it enjoys the limited liability of a corporation . The LLC may be a sole proprietorship, partnership or corporation for tax purposes.

4. Corporation - nonprofit: Nonprofit corporations focus on philanthropic work. Because their work benefits the public, they can receive tax-exempt status and not pay taxes on profits. They follow organizational rules similar to those of a C crop but also have special rules regarding profits.

5. Corporation - S corp: An S corporation has the liability protection of corporations along with additional tax benefits. The owners of S corporations can use the cash method of accounting if they don't have inventory. They can also have up to 75 shareholders, which makes it possible to attract more capital.

7. Corporation - C corp: Corporations offer the strongest amount of personal liability protection, but the cost to form a corporation is also higher. Corporations also require extensive reporting, record-keeping and complex operational processes.