Frequently Asked Questions (FAQs) about business structures

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1. What are the key differences between a sole proprietorship and an LLC?
A sole proprietorship is the simplest form, with no legal distinction between the owner and the business. It’s easy to set up but offers no liability protection. An LLC (Limited Liability Company) provides liability protection, separating personal assets from business debts, but it involves more paperwork and formalities.

2. What is a partnership, and how does it differ from an LLC?
A partnership involves two or more individuals doing business together. Profits and losses are shared, and partners are personally liable for business debts. An LLC can also have multiple members but provides liability protection and more flexibility in management and profit-sharing.