Limited Liability Company (LLC)
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A Limited Liability Company (LLC) is its own entity, responsible for its own debts and liabilities. This structure protects the personal assets of the owners (members). This is the most popular business structure because it provides the structural simplicity of a sole proprietorship or partnership with many of the protections of a corporation. An LLC also allows for varying tax strategies, although generally are taxed exactly like a sole proprietorship or partnership.
A Sole Proprietorship is a simple business structure owned and run by a single individual (regardless of whether they have employees). It is not a legal entity, nor does it “create” a business or offer any protection for the personal assets of the owner. The owner is personally liable for all business debt (loans, lawsuits etc.).
A Partnership is very similar to a Sole Proprietorship, but has multiple owners. It is its own entity only insofar as it groups two or more people together for the purpose of business and liability. It also does not offer any protection of personal assets, and the owners are generally all equally and severally liable for all business debt.
A Non-Profit Corporation is an organization generally exempt from most, if not all state and federal taxes. Their purpose is generally something of intrinsic value or a service to the community. Such organizations must apply for and be approved for exempt status by the IRS and/or state. Examples include: Churches, missions, youth sports teams or leagues, homeowners associations and others.
Trade Name / DBA
When starting a new business, some owners will opt for a Trade Name or DBA, also referred to as Fictitious Name or Assumed Business Name. This is not actually a formal business structure, but generally the name the owner(s) wish to give their Sole Proprietorship or General Partnership. It can also be registered as an alternate name for an existing structure like an LLC or a Corporation.
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