A sole proprietorship is a type of business entity which legally has no separate existence from its owner. All debts of the business are debts of the owner. A sole proprietorship essentially means a person does business in his or her own name and there is only one owner. A sole proprietorship does not pay corporate taxes, but rather the person who organized the business pays personal income taxes on the profits made.
A sole proprietor may do business with a trade name other than his or her legal name. In Hawaii, the sole proprietor is required to register the trade name or "Doing Business As" with a government agency. This also allows the proprietor to open a business account with banking institutions.
A partnership is a type of business entity in which partners (owners) share with each other the profits or losses of the business undertaking in which all have invested. Partnerships are often favored over corporations for taxation purposes, as the partnership structure does not generally incur a tax on profits before it is distributed to the partners.
The basic form of partnership is a general partnership, in which all partners manage the business and are personally liable for its debts. Two other forms which have developed the limited partnership (LP), in which certain "limited partners" relinquish their ability to manage the business in exchange for limited liability for the partnership's debts, and the limited liability partnership (LLP), in which all partners have some degree of limited liability.
A business corporation is a for-profit, limited liability entity that has a separate legal personality from its members. A corporation is owned by multiple shareholders and is overseen by board of directors, which hires the business's managerial staff.
LIMITED LIABILITY COMPANY
A limited liability company (L.L.C. or LLC) is a legal form of business company offering limited liability to its owners. It is similar to a corporation, and is often more flexible, the owners have limited liability for the actions and debts of the company, it's especially popular and suitable for smaller companies with a single owner.
An S corporation or S-corp, for United States federal income tax purposes, is a corporation that makes a valid election to be taxed under Subchapter S of Chapter 1 of the Internal Revenue Code. In general, S Corporations do not pay any income taxes. Instead, the corporation's income or losses are divided among and passed through to its shareholders. The shareholders must then report the income or loss on their own individual income tax returns.
LIMITED LIABILITY LIMITED PARTNERSHIP
The limited liability limited partnership (LLLP) is a relatively new modification of the limited partnership. Like a limited partnership, an LLLP is a limited partnership and as such consists of one or more general partners and one or more limited partners. The general partners manage the LLLP, while typically the limited partners only have a financial interest.