1. Sole Proprietorship - Description: A business owned and operated by a single individual. - Advantages: Simple to establish; owner has complete control. - Disadvantages: Unlimited personal liability; harder to raise capital.
2. Partnership - Description: A business owned by two or more people. - Types: General Partnership (GP) and Limited Partnership (LP). - Advantages: Easy to form; shared responsibility. - Disadvantages: Shared liability; potential for conflicts.
3. Limited Liability Company (LLC) - Description: A hybrid entity combining the benefits of partnerships and corporations. - Advantages: Limited liability; flexible management. - Disadvantages: Can be more complex to set up than sole proprietorships or partnerships.
4. Corporation - Description: An independent legal entity owned by shareholders. - Types: C Corporation, S Corporation. - Advantages: Limited liability; easier to raise capital. - Disadvantages: Double taxation (C Corp); more regulatory requirements.
5. Nonprofit Organization - Description: An entity organized for a charitable, educational, or similar purpose. - Advantages: Tax-exempt status; eligible for grants. - Disadvantages: Must adhere to strict regulatory standards; profits can't be distributed.