What type of business entities are covered under small business law?

In Hawaii, small business law typically covers four main types of business entities. These include sole proprietorships, partnerships, limited liability companies (LLCs), and corporations. A sole proprietorship is a business in which a single individual owns all the property of the business. This type of business is usually simple to set up— typically no paperwork is required to get started. However, the downside to this type of business is that the owner is personally responsible for any debts and liabilities that may occur from running the business. A partnership is a business where two or more people share ownership. This type of business requires a formal written agreement between the parties, called a partnership agreement. Partnerships can be general or limited, depending on the arrangement. In a limited partnership, one partner will have limited liability while the other is exposed to full liability for business debts. LLCs are similar to partnerships, but with a few key differences. LLCs offer the benefit of limited liability protection to both the owners and the business, which means the owners are not personally responsible for any debts or liabilities that arise from the business’s activities. This type of business requires filing paperwork with the state to get started. The final type of business covered by small business law is the corporation. Corporations are more complex than the other types of business entities, and often require a lawyer to help with the paperwork. Corporations protect the owners from personal liability but come with a number of administrative requirements, such as the need to file a yearly report with the state.

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What type of business entities are covered under small business law?

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