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4 Types of Business Structure | Sole Proprietorship | Corporations | LLC vs Corporation

2,655 views · Published 7 October 2016 · 3:56 · Indexed 26 September 2026

Channel: ImmigrationBiz · 2016 · Entertainment

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BUSINESS STRUCTURES

First, you have to decide what type of structure is the best for your business. The main types are Sole Proprietorship, Partnership, Limited Liability Company, and Corporation.

A sole proprietorship is the simplest structure chosen to start a business. It is an unincorporated business owned and run by one person with no distinction between the business and you, the owner. You are entitled to all profits and are responsible for all your business’s debts, losses and liabilities. You do not have to take any formal action to form a sole proprietorship. As long as you are the only owner, this status automatically comes from your business activities. But like all businesses, sometimes you need to obtain the necessary licenses and permits – it depends on nature and location of your business.

Partnership is a simple business formation, where two or more people share ownership. Each partner contributes to all aspects of the business, including money, property, labor or skill. In return, each partner shares in the profits and losses of the business. It is created by an agreement, and in most U.S. states, without requiring a public filing.

Limited Liability Company (LLC) is a corporate structure where the members of the company cannot be held personally liable for the company's debts or liabilities. Limited liability companies are essentially hybrid entities that combine the characteristics of a corporation and a partnership or sole proprietorship. While the limited liability feature is similar to that of a corporation, the availability of flow-through taxation to the members of an LLC is a feature of partnerships.

Corporation can be a C-Corporation or a S-corporation. C-Corporation (C-Corp, Inc., Incorporated) is legally viewed as an individual entity, separate from its owners - shareholders. This means that when the corporation is sued, shareholders are only liable to the extent of their investments in the corporation. Any debts that the corporation may acquire are also viewed as the corporation's responsibility. An S corporation (sometimes referred to as an S Corp) is a special type of corporation created through an IRS tax election. As a non – resident alien, you cannot be a shareholder in S – corporation so we will focus only on C-Corp.

But the most common entities for investors who are coming to the USA doing business are LLC and C- Corporation. Therefore, we will now on focus on these two types of business structures and their advantages/disadvantages.

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Marieta Oslanec, Esq is an Attorney, Entrepreneur, E-2 Visa Investor, Author, Founder of ImmigrationBIz, an international law firm, and her main focus is to help foreign investors and entrepreneurs coming to the U.S. to start living their American Dream. Her business and story were featured in Forbes, CBS, Playboy, Pravda, EMMA, WOMANMAN, LA Start-up Magazine.

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