Saturday, February 12, 2011

What Is A Business Entity?

Business entities are all around us. Virtually all products you see at a store were produced or manufactured by a business entity. The Coca-Cola Company, Microsoft Corporation, and We The People LLC are just a few examples of business entities.

In somewhat technical terms, a business entity generally refers to an organization that is operated for a profitable or charitable purpose. A business entity has an existence separate and distinct from its owners. It is a separate person in the eyes of the law.

The most common types of business entities include C corporations, S corporations, LLC's ---limited liability companies, general partnerships, limited partnerships and non-profit (or not forprofit) corporations. There are many other types of business entities, but they are not as common as those listed. A sole proprietorship is the traditional unincorporated one-person business. For legal and tax purposes, the business is the owner. It has no existence outside the owner and is generally not classified as a business entity.

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