Different Types of Business Ownership Structures

​In order to start a business, you need to follow some guidelines, here is a list of the most common business structures to shape your business:

●       Sole proprietorship
●       Partnership
●       Limited partnership
●       Limited Liability Company (LLC)
●       Corporation (for-profit)
●       Nonprofit corporation (not-for-profit), and
●       Cooperative
 
Sole Proprietorship and Partnership
They both have many similarities but one huge difference. You don’t need to file paperwork or follow legal procedures when it comes to sole proprietors and partnership. In both cases, the owner(s) is responsible for the profit and loss situations. It is the owner’s responsibility when they face legal charges and court orders. When the owners start these business structures, they commit to bearing all the challenges faced by their business.
 
Limited Partnerships
Limited partnerships are expensive and very hard to run. The limited partnerships are run by limited partners and general partners. Limited partners are in the shadows but reap full rewards.
 
 
Corporations and LLCs
Corporation is totally different from partnerships and sole proprietors. It is a separate identity and the owner is completely different from the entity.
The owners of an LLC pay taxes on their shares of the business income and it is similar to partnerships when it comes to taxes. Corporations and LLCs are mostly used when a risk of being sued by customers or they have personal assets they want to protect from business creditors.
 
Nonprofit Corporations

Nonprofit corporations, just like the name says, is a corporation that is made for the benefit of society. It is mostly run on donations and charities that are made by any one wants to. The government has exempted the nonprofit organizations of all the taxes, because they benefit the society in one way or the other.
 
Cooperatives
Cooperatives are made by people who love to start their businesses. This can be art, crafts or anything they love to do. These are referred in the market as groups. The environment of these groups are often known to be informal, since these are not legally registered.