The following are the seven most common Legal Structures for Business organizations: 

A partnership is a company owned by two or more individuals who share earnings and obligations. Two or more persons share ownership of a single firm in a partnership. The legislation, like that of proprietorships, makes no distinction between the business and its owners. A formal agreement should be in place between the partners that spell out how decisions will be made, earnings will be divided, disagreements will be addressed, new participants will be accepted to the partnership, partners can be bought out, and how the partnership will be dissolved if necessary.

3. Limited Partnership

A limited partnership is a commercial partnership that often involves firm owners and investors. A limited partnership, often known as an LP, is a subset of a general partnership. While it’s not as popular, it’s a good option for firms wanting to acquire cash from investors who don’t want to be involved in the day-to-day operations. There are two types of partners in a limited partnership: the General Partner and the Limited Partner. The general partner is often involved in day-to-day business decisions and is personally liable for the company. On the other hand, a limited partner (usually an investor) is not liable for debts and does not participate in the company’s normal business administration.

A corporation is a sort of completely self-contained company with stockholders. One of the most difficult business kinds to understand. A corporation is a completely self-contained organization that is owned by several shareholders who are given shares in the company. A company is legally defined as a distinct entity from people who own it. A company is able to be taxed, sued, and engage in contracts. When the ownership of a company changes, the corporation continues to exist.

5. Limited Liability Company (LLC) 

A Limited Liability Company (LLC) is a hybrid of a partnership and a corporation that was created to make starting a small business easier. One of the most common forms of business for new businesses.  A limited liability company (LLC) is a newer kind of organization that combines the benefits of a partnership and a corporation. LLC owners are referred to as members rather than shareholders. No matter how many members an LLC has, it must have a managing member who is responsible for the day-to-day operations. However, unlike a general partnership, the formation is more complicated and official.

6. Nonprofit 

A Nonprofit is a sort of company that donates its revenues to charity. Tax-free, however, there are certain restrictions. A nonprofit organization is self-explanatory in that it is a for-profit corporation dedicated to educational or philanthropic objectives. The “non-profit” element is important since any money made by the firm must be maintained by the organization to cover its expenses, programming, and other costs.

7. Cooperative (co-op)

A cooperative (co-op) is a business that is owned and runs for the benefit of the organization’s members who use its services. a cooperative, or a business that is entirely owned and run for the benefit of the organization’s members who use its services. In other words, everything the cooperative earns is distributed among the members, and no money is required to be handed out to any external stakeholders. Cooperatives, unlike other forms of enterprises with shareholders, sell shares to cooperative “members,” who subsequently have a role in the cooperative’s operations and direction. The primary difference between forming a cooperative and the other types of companies described is that you’ll need to write rules, fill out a membership application, and form a board of directors with a charter member meeting.