Business Entities - Corps, LLCs, and Partnerships
LegalMatch Law Library Managing Editor, Ken LaMance, Attorney at Law 
Types of Business Entities
- Corporations - A corporation is a legal entity distinct and apart from the corporation's owners, referred to as shareholders and managers, known as directors and officers. A corporation may enter into contracts, sell and buy property, and be sued. Corporations can only be created by state statute and to form a corporation, strict guidelines must be adhered. The guidelines are defined by each state's statutes that cover corporate governance. The shareholders (owners) of a corporation are not responsible (in most instances) for corporate debt.
- Limited Liability Companies -A Limited Liability Company (LLC) is generally defined as a business entity consisting of one or more persons. An LLC, like a corporation, has limited liability under law however limited liability companies are not held to the same strict management requirements as corporations. In fact LLCs are a legal entity created only by state law. Limited liability companies have managers, members and often employees. The management of the business is by the owners (members) of the LLC. Regarding company debt obligations, the liability of Limited Liability Company members, managers and their employees is not personal.
- Limited Partnerships-Generally a limited partnership consist of one or more limited partners and one or more general partners. The role of the general partners is to make the management decisions of the business, while that of the limited partners is limited to providing capital and taking profits as investors. However, 100% of the risk is assumed by the general partners, who also assume all debts and any liabilities and of the limited partnership. Conversely, the limited partners only risk their financial contributions made to the limited partnership. In most cases, all partners in a limited partnership share the profits of the business.
Vea esta página en español: Corporaciones Licencias Asociaciones Etc o visita Abogados-Leyes.com para más información legal.
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Last Modified: 12-16-2011 03:59 PM PST
