What are the different types of business entities?
In Hawaii, businesses can be registered as one of several types of business entities. The four most common types of business entities in Hawaii are: 1. Sole Proprietorship: A business owned and operated by a single individual. This type of business is usually the simplest and least expensive to set up. Owners of sole proprietorships are solely responsible for all of the business liabilities and debts. 2. Partnership: A business owned and operated by two or more individuals. Partnerships may be either general or limited, depending on the roles and responsibilities of each partner. General partnerships can be more difficult and expensive to set up, as all partners are liable for all the debts, obligations, and liabilities of the business. Limited partnerships must have at least one general partner who is responsible for the debts, obligations, and liabilities of the business. 3. Corporation: A business considered a legal entity distinct from its owners. Corporations are owned by shareholders and managed by a board of directors. Owners of a corporation are not personally liable for any of the business debts or liabilities. 4. Limited Liability Company (LLC): A business entity that provides the limited liability of a corporation, but with the benefit of pass-through taxation of a partnership or a sole proprietorship. LLCs are considered a separate legal entity, so the owners of the business are not personally liable for any of the business debts, or liabilities. Each type of business has its own advantages and disadvantages, so it’s important to do your research and consult an experienced lawyer in order to decide which type of business entity is right for you.
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