Chapter 15: Business Entities Overview

Chapter 15: Business Entities Overview

1. Corporation

   • Business entity recognized as a separate entity from its owners under state law

2. Limited liability company (LLC)

   • A type of flow-through entity for federal income tax purposes
     • The owners of the LLC have limited liability with respect to the entity's debts or liabilities
       • Generally taxed as partnerships for federal income tax purposes

3. General partnership (GP)

   • A partnership with partners who all have unlimited liability with respect to the liabilities of the entity

4. Limited partnership (LP)

   • A partnership with at least one general partner with unlimited liability for the entity's debts and at least one limited partner with liability limited to the limited partner's investment in the partnership

5. Sole proprietorship

   • A business entity that is not legally separate from the individual owner of the business
     • Income of a sole proprietorship is taxed and paid directly by the owner