What are the different types of business entities?

Business entities are the various legal structures available for businesses to choose from when registering their business. In South Carolina, the different types of business entities available are sole proprietorships, general partnerships, limited partnerships, corporations, and limited liability companies (LLCs). A sole proprietorship is the simplest type of business entity and the default for many small business owners. It is an unincorporated business owned and operated solely by one person who has unlimited personal liability for the debts and obligations of the business. A general partnership operates similarly to a sole proprietorship but involves two or more individuals operating a business in which all partners share liability for the debts and obligations of the business. A limited partnership is similar to a general partnership, but it has at least one general partner and one limited partner. The limited partner is not liable for the debts and obligations of the business. A corporation is a separate legal entity from its owners, and the owners are generally not held liable for the debts and obligations of the business. This type of business entity provides limited liability and continuity, and corporations are owned by shareholders, who are not personally liable for the debts and obligations of the corporation. Finally, a limited liability company (LLC) is a hybrid of a corporation and a partnership. This type of business entity provides limited liability to its owners and is generally structured based on the operating agreement of the members. The LLC is not responsible for the debts and obligations of its members and is considered a pass-through entity for tax purposes. These are the five basic business entities available in South Carolina. Each type has its own advantages and disadvantages depending on the type of business and the goals of the owners. It is important to consult with a qualified attorney before deciding which entity to select.

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What are the different types of business entities?

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