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There are many types of business entity defined in the legal systems of various countries.These include corporations,cooperatives,partnerships,sole traders,limited liability company and other specialized types of organization.
Sole proprietors are unincorporated businesses.They are also called independent contractors,consultants,or freelancers.There are no forms you need to fill out to start this type of business.The only thing you need to do is report your business income and expenses.This is the easiest form of business to set up,and the easiest to dissolve.
Corporations are incorporated businesses.Every from of business besides the sole proprietor is considered a separate entity,and this often provides a measure of legal and financial protection for the shareholders.The shareholders of corporations have limited liability protection, and corporations have full discretion over the amount of profits they can distribute or retain.Corporations are presumed to be for-profit entities,and as soch they can have an unlimited number of years with losses.Corporations must have at least one shareholder.
Partnerships are unincorporated businesses.Like corporations,partnerships are separate entities from the shareholders.Partnerships must have at least two shareholders.Partnerships distribute all profits and losses to their shareholders without regard for any profits retanied by the business for cash flow purposes.