Companies right now could be categorized as being one of quite a few different types of business entities. The normal categories are as follows: a sole proprietorship, a partnership (under which it might fall into one of three classes - general, limited, and limited liability partnership), a corporation, or possibly a cooperative. These, nevertheless, are simply the general forms of business entities, as various nations around the world have got their own different types of business entities. To illustrate, in Chile you'll find four types of business entities, in Indonesia you can find ten, while in Luxembourg you'll find only two. For all those aiming to start their own company, classifying their company as being a definite entity generally is a harrowing endeavor in itself, which describes why a business plan consultant is essential.

Being that there're a wide variety of varieties of business entities out there, a small business consultant is important every time a business proprietor wants to build an organization. Here is a look at two principal varieties of business entities.

Corporation

There's lots of businesses in the world today which can be categorized as being a corporation. As per the Reference website, a corporation is "a legal entity that is created under the laws of a state designed to establish the entity as a separate legal entity having its own privileges and liabilities distinct from its owner." As per R. C. Clarke's book called "Corporate Law" and Henry Hansmann's book "The Anatomy of Corporate Law," a corporation has four specific core elements:

- Legal individuality

- Limited liability

- Transferable shares

- Centralized management beneath a broad layout

A significant characteristic of modern corporations will be the limited liability enjoyed by its proprietors, shareholders, and workers. If ever the organization should collapse, either through a lack of a small business consultant or any other reason, they are not directly subject to the losses or debts the business incurs: investors only might lose their investment while personnel will lose their jobs, the financial obligation defintely won't be carried over.

Limited liability company

A limited liability company is actually a relatively recent addition to the types of business entities covered by a business plan consultant. Based on LLC Reporter, the limited liability company got its beginning in Germany in 1892 as the government enacted a law permitting the creation of Gesellschaft mit beschrnkter Haftung (GmbH), a precursor of modern-day limited liability organizations.

A contemporary limited liability organization is a really flexible kind of business entity enjoying the characteristics found in a corporation, a partnership, as well as a sole proprietorship. The attribute it shares with a corporation is that it has limited liability, as the characteristic it shares with a partnership is that it may have "pass through income taxation." This is where an entity's income runs through to its stock investors and owners.

A limited liability company, due to its flexible nature, can decide to end up being taxed as a form of sole proprietorship, a partnership, an S corporation, or even perhaps a C corporation.

Any company owner seeking to beginning their own organization would be well advised to talk to a business plan consultant to begin with, simply because these authorities are familiar with the particulars of business entities, regardless of what type they could be.