Partnerships carry a dual status as a sole proprietorship or limited liability partnership, depending on the entity's funding and liability structure.

Under an LLC, members are protected from personal liability for the debts of the business if it cannot be proven that they acted in an illegal, unethical or irresponsible manner in carrying out the activities of the business.

Corporations can sell shares of stock to secure additional funding for growth, while sole proprietors can only obtain funds through their personal accounts, using their personal credit or taking on partners.

Choosing the best legal structure for your business requires knowledge of your line of work, and an understanding of local, state and federal laws. Tax laws are constantly changing and the need for capital is always present, so it's crucial for business owners to evaluate which business structure offers them the advantages that will save them money and help them grow.

We've compiled the most common types of business entities and their notable features to help you decide on the best legal structure for your business.

The most common types of business entities include sole proprietorships, partnerships, limited liability companies, corporations and cooperatives. Here's more about each type of legal structure.

This is the simplest form of business entity. With a sole proprietorship, one person is responsible for all a company's profits and debts.

"If you want to be your own boss and run a business from home without a physical storefront, a sole proprietorship allows you to be in complete control," said Deborah Sweeney, CEO of MyCorporation. "This entity does not offer the separation or protection of personal and professional assets, which could prove to become an issue later on as your business grows and more aspects hold you liable."

Proprietorship costs vary, depending on which market your business is part of. Generally, your early expenses will consist of state and federal fees, taxes, equipment needs, office space, banking fees, and any professional services your business decides to contract. Some examples of these businesses are freelance writers, tutors, bookkeepers, cleaning service providers and babysitters.

Here are some of the advantages of this business structure:

Easy setup. A sole proprietorship is the simplest legal structure to set up. If your business is owned by you and only you, this might be the best structure for your business. There is very little paperwork since you have no partners or executive boards to answer to.

Low cost. Costs vary depending on which state you live in, but, generally, the only fees associated with a proprietorship are license fees and business taxes.

Tax deduction. Since you and your business are a single entity, you may be eligible for certain business tax deductions, such as a health insurance deduction.

Easy exit. Forming the proprietorship is easy and so is exiting one. As a single owner, you can dissolve your business at any time with no formal paperwork required. For example, if you start up your own daycare center and wish to fold the business, you can simply refrain from operating the daycare and advertising your services.

This entity is owned by two or more individuals. There are two types: a general partnership, where all is shared equally; and a limited partnership, where only one partner has control of its operation while the other person (or persons) contributes to and receives part of the profits. Partnerships carry a dual status as a sole proprietorship or limited liability partnership (LLP), depending on the entity's funding and liability structure.

"This entity is ideal for anyone who wants to go into business with a family member, friend or business partner, like running a restaurant or agency together," said Sweeney. "A partnership allows the partners to share profits and losses, and make decisions together within the business structure. Remember that you will be held liable for the decisions made, as well as those actions made by your business partner."

The cost of a general partnership varies, but it is more expensive than a sole proprietorship, because you want an attorney to review your partnership agreement. The experience and location of the attorney can affect the price range. A general partnership must be a win-win for both sides for it to be successful.

Here are some of the advantages of this business structure:

Easy to form. Like a sole proprietorship, there is little paperwork to file. If your state requires you to operate under a fictitious name ("doing business as" or DBA), you'll need to file a Certificate of Conducting Business as Partners and draft an Articles of Partnership agreement, both of which have additional fees. A business license is usually needed as well.

Growth potential. You're more likely to obtain a business loan when there's more than one owner. Bankers can consider two credit lines rather than one, which can be useful if you have a less-than-stellar credit score.

Special taxation. General partnerships must file federal tax Form 1065 and state returns, but, usually, they do not pay income tax. Both partners report their shared income or loss on their individual income tax return. For example, if you opened a bakery with a friend and structured the business as a general partnership, you and your friend are co-owners. Each owner brings a certain level of experience and working capital to the business, which can affect each partner's share of the business and their contribution. Let's say you brought the most seed capital for the business; it could be decided that you retain a higher share percentage, making you the majority owner.

The individual tax return is a type of income tax return filed by an individual. Both single and married taxpayers, with and without dependents, file a return. Individual filers always file their returns on a version of Form 1040. Every individual filer who earns a certain amount of income must file this type of tax return.

Individual taxpayers complete Form 1040 and Form 1040 SR. Once complete, the taxpayer will submit the form by the day which falls on or near April 15th of each year. The selection of the individual tax return form to complete depends on the individual's filing status, their income, the deduction they wish to claim, and any credits that are due to their specific situation.1 There is also Form 4868 if extensions are necessary

Every U.S. state, even those without a state income tax, has a state taxing authority. This agency oversees the annual collection of state tax. Taxpayers file individual state tax returns unique to the state. Most state tax returns assess and calculate tax concerning line items from the federal tax return.

We provide advisory legal services for business entities ranging from small companies to multinational corporations. We give general advice on the setting up of businesses and inflow of investment funds into local entities such as companies, partnerships, non-profit organizations and trusts. We also provide advice on the regulatory environment for the various types of entities and the sectors within which they operate.

→ Memorandum of Article.
→ Incorporation.
→ Trade License.
→ Bank Account open.
→ BIDA Registration.
→ e-TIN Registration.
→ e-BIN Registration.
→ ERC & IRC Registration.
→ Balance Sheet etc.

We provide company formation for local and foreigners included all company related services under below-