To determine your company’s structure, review its formation documents. A corporation will have articles of incorporation, while an LLC uses articles of organization. Partnerships typically rely on a partnership agreement, and a sole proprietorship may not require formal registration beyond a business license. Joint stock companies issue shares and have bylaws or shareholder agreements. Checking these documents will clarify your business's legal structure.
- Corporation: A legal entity separate from its owners (shareholders), offering limited liability protection. It can raise capital by issuing stock and has perpetual existence.
- Partnership: A business owned by two or more individuals who share profits, losses, and responsibilities. Partners are personally liable unless it’s a limited partnership (LP) or limited liability partnership (LLP).
- Sole Proprietorship: A business owned and operated by one person, without distinction between the owner and the business. The owner has full control but also bears unlimited personal liability.
- Joint Stock Company A business entity with shareholders who own transferable shares. It operates like a corporation but may have some partnership-like governance features.
- Limited Liability Company (LLC): A hybrid structure that offers the limited liability of a corporation with the tax benefits and flexibility of a partnership. Members manage it, and profits/losses pass through to them for tax purposes.
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