Basics of Business Structures

Flashcards covering key vocabulary related to various business structures, including definitions and important aspects of each.

Sole Proprietorship

A business structure where one individual owns and operates the business, with complete control and unlimited personal liability.

Partnership

A business structure where two or more individuals own and operate a business together.

Limited Partnership (LP)

A partnership with one general partner who has unlimited liability and other partners who have limited liability.

Limited Liability Partnership (LLP)

A partnership in which all partners have limited liability, protecting them from debts against the partnership.

Limited Liability Company (LLC)

A hybrid business structure that combines the benefits of a corporation and a partnership, protecting personal assets from business liabilities.

C Corporation (C Corp)

A legal entity that is separate from its owners, which can make a profit, be taxed, and face legal liabilities.

S Corporation (S Corp)

A special type of corporation that allows profits and some losses to pass through directly to the owners' personal income, avoiding double taxation.

Benefit Corporation

A for-profit corporation that is accountable to both profit and public benefit, required to meet higher accountability standards.

Close Corporation

A corporation with fewer shareholders that operates with fewer formalities and restrictions than a traditional corporation.

Nonprofit Corporation

An organization formed for charitable, educational, or other public benefit purposes, which does not pay income taxes on profits.

Cooperative

A business owned and operated for the mutual benefit of its members, with profits distributed among those who use its services.

Tax Status

The classification of a business regarding how it is taxed, which can differ from its business structure.