[{"data":1,"prerenderedAt":533},["ShallowReactive",2],{"document-different-business-structures-explained-D13328":3},{"document":4,"label":26,"preview":11,"thumb":27,"thumb600":28,"description":5,"descriptionCustom":6,"apiDescription":5,"pages":8,"extension":10,"parents":29,"breadcrumb":33,"related":41,"customDescModule":180,"customdescription":6,"mdFm":181,"mdProseHtml":532},{"description":5,"descriptionCustom":6,"label":7,"pages":8,"size":9,"extension":10,"preview":11,"thumb":12,"svgFrame":13,"seoMetadata":14,"parents":16,"keywords":15},"THE DIFFERENT BUSINESS STRUCTURES EXPLAINED One of the most important decisions you must make when starting out a business is choosing a business structure that fits your business entity and the aim you want to achieve with your business entity. There are several factors that need to be considered when you're pondering which legal business structure to follow. The common factors include the nature of the business in question, the liability assumed, the complexities of the business, the required formalities, and tax incentives. A business structure is a type of legal organization for a business. It ensures that a business is recognized legally in the market. The type of structure your business takes on will be determined by the structure needed to achieve your business objectives. You must consider the following when deciding on a business structure: Business representation required Business operations Personnel involved Taxes Investments and liabilities There are various business structures with distinctive pros and cons that should fit with the goals of the business. The five most common business structures are: Sole Proprietorship This is the most common business structure. A business structure that's referred to as a sole proprietorship means that one person is the sole owner of the business. According to the IRS, \"someone who owns an unincorporated business by himself or herself\" is referred to as a sole proprietor. This means that the sole owner is responsible for the daily operations of the business. The sole proprietor does not have a separate entity from his business, and all liabilities and revenues are the entitlement and responsibility of the owner. The pros of a sole proprietorship include a low requirement for capital and ease of maintenance with no need for registration to start or maintain the business. On the other hand, the cons include being personally liable for the entire business. Also, there are no tax benefits that accrue to the sole proprietor; rather, they must pay self-employment tax on all business earnings after filling out Form 1040 with Schedule C and SE, or the form specific for your country, city or state. Partnership This is another common form of business structure where two or more people come together to own a business entity and carry out business ventures together. A partnership business can either be a general partnership, a limited partnership, or a limited liability partnership. In a way, partnerships are like sole proprietorships because they also don't have separate legal recognition from their owners. Rather, the owners and the enterprise are considered the same entity. Also, the partners are involved in the daily operations of the business, making growth and expansion decisions, while they share the liabilities and revenues equally.",null,"Different Business Structures Explained","3",513,"doc","https://templates.business-in-a-box.com/imgs/1000px/different-business-structures-explained-D13328.png","https://templates.business-in-a-box.com/imgs/250px/13328.png","https://templates.business-in-a-box.com/svgs/docviewerWebApp1.html?v6#13328.xml",{"title":15,"description":6},"different business structures explained",[17,20,23],{"label":18,"url":19},"Business Plan Kit","/templates/business-plan-kit/",{"label":21,"url":22},"Board of Directors","/templates/board-of-directors/",{"label":24,"url":25},"Sales & Marketing","/templates/sales-marketing/","Different Business Structures Explained Template","https://templates.business-in-a-box.com/imgs/400px/13328.png","https://templates.business-in-a-box.com/imgs/600px/13328.png",[30,17,20,23],{"label":31,"url":32},"Templates","/templates/",[34,35,38],{"label":31,"url":32},{"label":36,"url":37},"Legal Agreements","/templates/business-legal-agreements/",{"label":39,"url":40},"Incorporation & Bylaws","/templates/incorporation-and-bylaws/",[42,46,50,54,58,62,66,70,74,78,82,86,90,107,122,136,153,167],{"label":43,"url":44,"thumb":45,"extension":10},"Business Digital Transformation Explained","/template/business-digital-transformation-explained-D13315","https://templates.business-in-a-box.com/imgs/250px/13315.png",{"label":47,"url":48,"thumb":49,"extension":10},"Different Option Enclosed in the Following Pages","/template/different-option-enclosed-in-the-following-pages-D1261","https://templates.business-in-a-box.com/imgs/250px/1261.png",{"label":51,"url":52,"thumb":53,"extension":10},"Collaboration Leadership Explained","/template/collaboration-leadership-explained-D13319","https://templates.business-in-a-box.com/imgs/250px/13319.png",{"label":55,"url":56,"thumb":57,"extension":10},"Marketing Metrics Explained","/template/marketing-metrics-explained-D13363","https://templates.business-in-a-box.com/imgs/250px/13363.png",{"label":59,"url":60,"thumb":61,"extension":10},"Leadership VS Management Explained","/template/leadership-vs-management-explained-D13020","https://templates.business-in-a-box.com/imgs/250px/13020.png",{"label":63,"url":64,"thumb":65,"extension":10},"Revenue Growth Management Explained","/template/revenue-growth-management-explained-D13389","https://templates.business-in-a-box.com/imgs/250px/13389.png",{"label":67,"url":68,"thumb":69,"extension":10},"The Risk Management Process Explained","/template/the-risk-management-process-explained-D13408","https://templates.business-in-a-box.com/imgs/250px/13408.png",{"label":71,"url":72,"thumb":73,"extension":10},"New Product Development Process Explained","/template/new-product-development-process-explained-D13366","https://templates.business-in-a-box.com/imgs/250px/13366.png",{"label":75,"url":76,"thumb":77,"extension":10},"Product Management Vs Project Management Explained","/template/product-management-vs-project-management-explained-D13377","https://templates.business-in-a-box.com/imgs/250px/13377.png",{"label":79,"url":80,"thumb":81,"extension":10},"Business Continuity Policy","/template/business-continuity-policy-D13461","https://templates.business-in-a-box.com/imgs/250px/13461.png",{"label":83,"url":84,"thumb":85,"extension":10},"Business Center Business Plan","/template/business-center-business-plan-D11935","https://templates.business-in-a-box.com/imgs/250px/11935.png",{"label":87,"url":88,"thumb":89,"extension":10},"Business Travel Safety Policy","/template/business-travel-safety-policy-D13612","https://templates.business-in-a-box.com/imgs/250px/13612.png",{"description":91,"descriptionCustom":6,"label":92,"pages":93,"size":94,"extension":10,"preview":95,"thumb":96,"svgFrame":97,"seoMetadata":98,"parents":99,"keywords":105,"url":106},"LIMITED LIABILITY COMPANY OPERATING AGREEMENT This Limited Liability Company Operating Agreement is entered into as of the [DATE], BETWEEN: [INDIVIDUAL NAMES] (the \"Managing Members\"), an individual with his main address located at OR a corporation organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [COMPLETE ADDRESS] AND: [COMPANY NAME] (the \"Non-Managing Members\"), an individual with his main address located at OR a corporation organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [COMPLETE ADDRESS] The Managing Members and the Non-Managing Members are referred to herein collectively as the \"Members\". The Members have formed the Company by causing a Certificate of Formation (the \"Certificate\") conforming to the requirements of the [STATE] Revised Limited Liability Company Act (the \"Act\") to be filed in the Office of the Secretary of State for the State of [STATE]. NAME, PURPOSE AND PRINCIPAL OFFICE OF COMPANY Name The name of the Company is [COMPANY NAME], LLC. The affairs of the Company shall be conducted under such name or such other name as the Managing Members may, in their discretion, determine. [COMPANY NAME] hereby grants the Company the right, at no cost, to use the [SPECIFY] name for the term of the Company as set forth in Article [SPECIFY] hereof. Agreement In consideration of the mutual covenants herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Members executing this Agreement hereby agree to the terms and conditions of this Agreement, as it may be amended from time to time. It is the express intention of the Members that this Agreement shall be the sole statement of agreement among them, and, except to the extent a provision of this Agreement expressly incorporates matters by express reference, this Agreement shall govern even when inconsistent with or different from the provisions of the Act or any other provision of law. Purpose; Powers Purpose. The primary purpose of the Company is to act as the general partner of [COMPANY NAME] (the \"Fund\"). Powers. Subject to all of the terms and provisions hereof, the Company shall have all powers necessary, suitable or convenient for the accomplishment of the purpose of the Company, including, without limitation, the following: to purchase, sell, invest and trade in securities of every kind, including, without limitation, capital stock, limited partnership interests, bonds, notes, debentures, securities convertible into other securities, trust receipts and other obligations, instruments or evidences of indebtedness, as well as in rights, warrants and options to purchase securities; to make and perform all contracts and engage in all activities and transactions necessary or advisable to [SPECIFY] out the purposes of the Company, including, without limitation, the purchase, sale, transfer, pledge and exercise of all rights, privileges and incidents of ownership or possession with respect to any Company asset or liability; the borrowing or lending of money and the securing of payment of any Company obligation by hypothecation or pledge of, or grant of a security interest in, Company assets; and the guarantee of or becoming surety for the debts of others; and otherwise to have all the powers available to it as a limited liability company under the Act. Registered Office and Agent The initial address of the Company registered office in [STATE] is, and its initial agent at such address for service of process is Incorporating Services Limited. The Managing Members may change the registered office and agent for service of process as they from time to time may determine. Principal Office The principal office of the Company shall initially be located at [ADDRESS]. The Managing Members may change the location of the principal office of the Company at any time. Definitions Additional Members. This term shall have the meaning ascribed to it in Paragraph 3.2. Affiliate. With reference to any person, any other person controlling, controlled by or under direct or indirect common control with such person. Agreement. This Operating Agreement of [COMPANY NAME], a [STATE] limited liability company. Assignee. This term shall have the meaning ascribed to it in Paragraph [NUMBER]. Bankruptcy. A person or entity shall be deemed bankrupt if: any proceeding is commenced against such person or entity as debtor for any relief under bankruptcy or insolvency laws, or laws relating to the relief of debtors, reorganizations, arrangements, compositions or extensions and such proceeding is not dismissed within [NUMBER] days after such proceeding has commenced, or such person or entity commences any proceeding for relief under bankruptcy or insolvency laws or laws relating to the relief of debtors, reorganizations, arrangements, compositions or extensions. Book Value. This term shall have the meaning ascribed to it in Paragraph 6.2(a). Capital Account. This term shall have the meaning ascribed to it in Paragraph 6.2(b). Capital Commitment. This term shall have the meaning ascribed to it in Paragraph 5.1. Capital Contribution. This term shall have the meaning ascribed to it in Paragraph 5.1(b). [SPECIFY]. The Company [PERCENTAGE] carried interest in the income of the Fund. Certificate. The Certificate of Formation of [COMPANY NAME], a [STATE] limited liability company. Code. [SPECIFY YOUR COUNTRY INTERNAL REVENUE ACT/CODE/LAW], as amended from time to time (and any corresponding provisions of succeeding law). Defaulting Member. This term shall have the meaning ascribed to it in Paragraph 5.4(a). Fiscal Quarter. This term shall have the meaning ascribed to it in Paragraph 6.2(c). Fiscal Year. This term shall have the meaning ascribed to it in Paragraph 6.2(d). Management Fee. The management fee receivable by the Company from the Fund. Net Income or Net Loss. This term shall have the meaning ascribed to it in Paragraph 6.2(e). Percentage Interest. This term shall have the meaning ascribed to it in Paragraph [NUMBER]. Sale or Exchange. This term shall have the meaning ascribed to it in Paragraph [NUMBER]. Securities Act. [YOUR COUNTRY ACT/CODE/LAW] as amended from time to time. Securities. Securities of every kind and nature and rights and options with respect thereto, including stock, notes, bonds, debentures, evidences of indebtedness and other business interests of every type, including interests in partnerships, joint ventures, proprietorships and other business entities. TMP. This term shall have the meaning ascribed to it in Paragraph 13.16. Termination Date. This term shall have the meaning ascribed to it in Paragraph 2.1. Treasury Regulations. The Income Regulations promulgated under the Code, as such Regulations may be amended from time to time (including corresponding provisions of succeeding Regulations). TERM AND TERMINATION OF THE COMPANY Term The term of the Company shall continue until [NUMBER] year after the dissolution of the Fund unless sooner terminated as provided in Paragraph 2.2 or by operation of law or extended as provided in Paragraph 2.3. The last day of the term of the Company, as such may be extended as provided herein, is referred to herein as the \"Termination Date.\" Termination The Company shall terminate prior to the end of the period specified in Paragraph 2.1 at the election of the Managing Members. The Managing Members shall deliver notice of such termination to the Non-Managing Members. Extension of Term The term of the Company may be extended by the Managing Members. The Managing Members shall provide notice of any such extension to the Non-Managing Members. INITIAL MEMBERS; CHANGES IN MEMBERSHIP Name and Address The persons listed on Exhibit A are hereby admitted as Members of the Company","LLC Operating Agreement","21",207,"https://templates.business-in-a-box.com/imgs/1000px/llc-operating-agreement-D5209.png","https://templates.business-in-a-box.com/imgs/250px/5209.png","https://templates.business-in-a-box.com/svgs/docviewerWebApp1.html?v6#5209.xml",{"title":6,"description":6},[100,102],{"label":36,"url":101},"business-legal-agreements",{"label":103,"url":104},"Incorporation Agreements","incorporation-agreement","llc operating agreement","/template/llc-operating-agreement-D5209",{"description":108,"descriptionCustom":6,"label":109,"pages":110,"size":9,"extension":10,"preview":111,"thumb":112,"svgFrame":113,"seoMetadata":114,"parents":116,"keywords":115,"url":121},"PARTNERSHIP AGREEMENT This Partnership Agreement (\"Agreement\") is made and effective this [Date], BETWEEN: [YOUR COMPANY NAME] (the \"First Partner\"), a corporation organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [YOUR COMPLETE ADDRESS] AND: [SECOND PARTNER NAME] (the \"Second Partner\"), an individual with his main address located at OR a corporation organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [COMPLETE ADDRESS] RECITALS Partners desire to join together for the pursuit of common business goals. Partners have considered various forms of joint business enterprises for their business activities. Partners desire to enter into a partnership agreement as the most advantageous business form for their mutual purposes. The parties hereto agree to form a limited partnership (the \"Partnership\") under [LAW, CODE OR ACT]. In consideration of the mutual promises contained in this agreement, partners agree as follows: NAME AND DOMICILE The name of the partnership shall be [name]. The principal place of business shall be at [address], [city], [state/province], unless relocated by consent of the partners. Purposes Subject to the limitations set forth in this Agreement, the purposes of the Partnership are to engage in the business of [DESCRIBE ACTIVITIES]; and to conduct other activities as may be necessary or incidental to or desirable in connection with the foregoing. DURATION OF AGREEMENT The term of this agreement shall be for [number] years, commencing on [date], and terminating on [date], unless sooner terminated by mutual consent of the parties or by operation of the provisions of this agreement. CLASSIFICATION AND PERFORMANCE BY PARTNERS Partners shall be classified as active partners, advisory partners, or estate partners. An active partner may voluntarily become an advisory partner, may be required to become one irrespective of age, and shall automatically become one after attaining the age of [age] years, and in each case shall continue as such for [number] years unless the partner sooner withdraws or dies. If an active partner dies, the partner's estate will become an estate partner for [number] years. If an advisory partner dies within [Number] years of having become an advisory partner, the partner will become an estate partner for the balance of the [number]-year period. Only active partners shall have any vote in any partnership matter. At the time of the taking effect of this partnership agreement, all the partners shall be active partners except [name] and [name], who shall be advisory partners. An active partner, after attaining the age of [age] years, or prior to that age if the [executive committee or as the case may be] with the approval of [two-thirds or as the case may be] of all the other active partners determines that the reason for the change in status is bad health, may become an advisory partner at the end of any calendar month on giving [number] calendar months' prior notice in writing of the partner's intention to do so. The notice shall be deemed to be sufficient if sent by registered mail addressed to the partnership at its principal office at [address], [city], [state/province] not less than [number] calendar months prior to the date when the change is to become effective. Any active partner may at any age be required to become an advisory partner at any time if the [executive committee or as the case may be] with the approval of [two-thirds or as the case may be] of the other active partners shall decide that the change is for any reason in the best interests of the partnership, provided notice of the decision shall be given in writing to the partner. The notice shall be signed by the [chairman or as the case may be] of the [executive committee or as the case may be] or, in the event of his or her being unable to sign at the time, by another member of the [executive committee or as the case may be]. The notice shall be served personally on the partner required to change his or her status or mailed by registered mail to the partner's last known address. Change of the partner's status shall become effective as of the date specified in the notice. Every active partner shall automatically and without further act become an advisory partner at the end of the fiscal year in which the partner's birthday occurs. In the event that an active partner becomes an advisory partner or dies, the partner or the partner's estate shall be entitled to the following payments at the following times: [describe] Each active partner shall apply all of the partner's experience, training, and ability in discharging the partner's assigned functions in the partnership and in the performance of all work that may be necessary or advantageous to further the business interests of the partnership. CONTRIBUTION Each partner shall contribute [amount] on or before [date] to be used by the partnership to establish its capital position. Any additional contribution required of partners shall only be determined and established in accordance with Article Nineteen. MANAGEMENT OF THE PARTNERSHIP The Partnership shall be managed by [SPECIFY]. Subject to the limitations specifically contained in this Agreement, [PARTY MANAGING THE PARTNERSHIP] shall have the full, exclusive and absolute right, power and authority to manage and control the Partnership and the property, assets and business thereof. [PARTY MANAGING THE PARTNERSHIP] shall have all of the rights, powers and authority conferred by law or under other provisions of this Agreement. Without limiting the generality of the foregoing, such powers include the right on behalf of the Partnership, in [PARTY MANAGING THE PARTNERSHIP]' sole discretion, to: Acquire, purchase, renovate, improve, and own any property or assets necessary or appropriate or in the best interests of the business of the Partnership, and to acquire options for the purchase of any such property; Borrow money, issue evidences of indebtedness in connection therewith, refinance, increase the amount of, modify, amend or change the terms of, or extend the time for the payment of, any indebtedness or obligation of the Partnership, and secure such indebtedness by mortgage, deed of trust, pledge or other lien on Partnership assets; Sue on, defend or compromise any and all claims or liabilities in favor of or against the Partnership and to submit any or all such claims or liabilities to arbitration; File applications, communicate and otherwise deal with any and all governmental agencies having jurisdiction over, or in any way affecting, the Partnership's assets or any part thereof or any other aspect of the Partnership business; Retain services of any kind or nature in connection with the Partnership business, and to pay therefore such remuneration deem reasonable and proper; and Perform any and all other acts deem necessary or appropriate to the Partnership business. TRANSFER OF PARNERSHIP INTERESTS Restrictions on Transfer None of the Partners shall sell, assign, transfer, mortgage, encumber, or otherwise dispose of the whole or part of that Partner's interest in the Partnership, and no purchaser or other transferee shall have any rights in the Partnership as an assignee or otherwise with respect to all or any part of that Partnership interest attempted to be sold, assigned, transferred, mortgaged, encumbered, or otherwise disposed of, unless and to the extent that the remaining Partner(s) have given consent to such sale, assignment, transfer, mortgage, or encumbrance, but only if the transferee forthwith assumes and agrees to be bound by the provisions of this Agreement and to become a Partner for all purposes hereof, in which event, such transferee shall become a substituted partner under this Agreement.","Partnership Agreement","8","https://templates.business-in-a-box.com/imgs/1000px/partnership-agreement-D12551.png","https://templates.business-in-a-box.com/imgs/250px/12551.png","https://templates.business-in-a-box.com/svgs/docviewerWebApp1.html?v6#12551.xml",{"title":115,"description":6},"partnership agreement",[117,118],{"label":36,"url":101},{"label":119,"url":120},"Partnership Agreements","partnership-agreement","/template/partnership-agreement-D12551",{"description":123,"descriptionCustom":6,"label":124,"pages":125,"size":126,"extension":10,"preview":127,"thumb":128,"svgFrame":129,"seoMetadata":130,"parents":131,"keywords":134,"url":135},"LIMITED PARTNERSHIP AGREEMENT OF [PARTNERSHIP NAME] THE SECURITIES REPRESENTED BY THIS INSTRUMENT OR DOCUMENT HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE [SECURITIES ACT OF 1933 OR OTHER ACT], AS AMENDED. WITHOUT SUCH REGISTRATION, SUCH SECURITIES MAY NOT BE SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED AT ANY TIME WHATSOEVER, EXCEPT UPON DELIVERY TO THE PARTNERSHIP OF AN OPINION OF COUNSEL SATISFACTORY TO THE GENERAL PARTNERS OF THE PARTNERSHIP THAT REGISTRATION IS NOT REQUIRED FOR SUCH TRANSFER OR UPON THE SUBMISSION TO THE GENERAL PARTNERS OF THE PARTNERSHIP OF SUCH OTHER EVIDENCE AS MAY BE SATISFACTORY TO THE GENERAL PARTNERS TO THE EFFECT THAT ANY SUCH TRANSFER SHALL NOT BE IN VIOLATION OF THE [SECURITIES ACT OF 1933 OR OTHER ACT], AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS OR ANY RULE OR REGULATION PROMULGATED THEREUNDER. This document evidences the following agreement and certificate of limited partnership entered into and to be effective on the date it is filed with the Secretary of State in [STATE], by and between [NAME], as general partner (\"General Partner\") and each of the individuals whose names are set forth on Exhibit \"A\" attached to this Agreement as limited partners (\"Limited Partners\"). 1. FORMATION 1.1 The parties hereby form a Limited Partnership (Partnership) under and pursuant to the [STATE/PROVINCE OR COUNTRY] Revised Limited Partnership Act, [Article of [code] of the [State/Province] of [STATE/PROVINCE]. 1.2 This Certificate of Limited Partnership shall be filed with the Secretary of [State/Province] of [STATE/PROVINCE], and thereafter the partners shall execute and cause to be filed and otherwise published such original or amended certificates evidencing the formation and operation of this Limited Partnership as may be required under the laws of the [State/Province] of [STATE/PROVINCE] and of any other states where the Partnership shall determine to do business. 1.3 The General Partner is hereby authorized and empowered by all the Limited Partners to prepare, file, and publish either the original or any amended or modified Certificates of Limited Partnership as may be necessary or desirable and each Limited Partner specifically designates and appoints the General Partner, for and on his or her behalf, as his or her attorney for the exclusive purposes of signing and attesting to such original or amended Certificates of Limited Partnership. 1.4 The purpose of the Partnership shall be as follows: to buy, manage and sell, as appropriate, all real property, including improvements and personal property located thereon, known as the [name or description of property], more particularly described in Exhibit \"B.\" [Add, if appropriate] Further, the Partnership shall engage in the [alteration and repair of the improvement, and personal property located in the subject real property.] 2. NAMES AND PLACE OF BUSINESS 2.1 The name of the Limited Partnership shall be [NAME]. 2.2 The business of the Partnership shall be conducted under that name and under such variations of the name as may be necessary to comply with the laws of other [States/Provinces] within which the Partnership may do business or make investments. 2.3 The General Partner shall promptly execute and duly file, with the proper offices in each state in which the Partnership may conduct the activities authorized in this Agreement, one or more certificates as required by the Fictitious Name or Assumed Name Act or similar statute in effect as to each such state in which such activities are so conducted. 2.4 The principal place of business shall be located at [address] and additional places of business may be located elsewhere. 2.5. The name and address of the General Partner of the Partnership are: [Name] [Address] 2.6 There are no other General Partners of this Partnership and no other person or entity has any right to take part in the active management of the business affairs of the Partnership. 2.7 The names and addresses or places of residence of the Limited Partners of this Partnership are set forth in Exhibit \"A\" attached to this Agreement and by this reference made a part of this agreement. There are no other Limited Partners to the Partnership other than those listed in the attached Exhibit \"A.\" 3. TERM OF PARTNERSHIP 3.1 The Partnership shall commence as of the date of this Agreement and shall continue in existence until [YEAR], unless it is sooner terminated, liquidated, or dissolved as provided below. 4. CONTRIBUTIONS OF CAPITAL 4.1 The capital to be contributed initially to the Partnership by the General Partner and all the Limited Partners shall be cash. 4.2 The initial capital to be contributed by each Partner, General and Limited, shall be the sum set opposite his or her name in the attached Exhibit \"A.\" 4.3 Each partner shall be personally liable to the Partnership for the full amount of his or her initial capital contribution. 4.4 The Limited Partners shall be required to make additional capital contributions to the Partnership, on written request by the General Partner, the Partner's pro rata share (the ownership percentage set opposite the name of each Limited and General Partner in Exhibit \"A\") of all costs, expenses, or charges with respect to the operation of the Partnership. [add, if appropriate] and the ownership operation, maintenance, and upkeep of any Partnership property including but not limited to ad valorem taxes, debt amortization (including interest payments), insurance premiums, repairs, professional fees, wages, and utility costs] to the extent such costs, expenses, or charges exceed the income, if any, derived from the Partnership and the proceeds of any loans made to the Partnership. a. If any Partner fails or refuses to contribute the entire amount of the initial capital called for and/or the additional capital as called for, the General Partner shall be authorized to declare forfeited Partner's capital account and ownership interest as liquidated damages for the failure. 5. PROFITS AND LOSSES 5.1 The amount of net profits and net losses of the Partnership to be allocated to and charged against each Partner shall be determined by the percentage set opposite his or her name in Exhibit \"A.\" 5.2 The term \"profits\" is hereby defined to mean income or gain of whatsoever kind actually incurred by the Partnership or which, because of generally accepted accounting procedures, must be deemed to have been incurred by the Partnership. 5.3 The term \"losses\" is hereby defined to mean any deduction, expenditure, or charge actually incurred by the Partnership or which, because of generally accepted accounting procedures, must be deemed to have been incurred by the Partnership. 5.4 Cash, when available, may be distributed by the General Partner to all Partners in the same ratio as profits and losses are shared. a. Cash distributions from the Partnership may be made by the General Partner to all Partners without regard to the profits or losses of the Partnership from operations; provided, that no cash distributions shall be made that will impair the ability of the Partnership to pay its just debts as they mature. b. The General Partner shall determine when, if ever, cash distributions shall be made to the Partners, pursuant to the provisions and the tenor of this Agreement. c. There shall be no obligation to return to the General Partner or the Limited Partners, or to any one of them, any part of their capital contributed to the Partnership, for so long as the Partnership continues in existence. d. No General or Limited Partner shall be entitled to any priority or preference over any other Partner as to cash distributions. e. No interest shall be paid to any Partner on the initial contributions to the capital of the Partnership or on any subsequent contributions of capital. 6. OWNERSHIP OF PARTNERSHIP PROPERTY 6","Limited Partnership Agreement","13",80,"https://templates.business-in-a-box.com/imgs/1000px/limited-partnership-agreement-D891.png","https://templates.business-in-a-box.com/imgs/250px/891.png","https://templates.business-in-a-box.com/svgs/docviewerWebApp1.html?v6#891.xml",{"title":6,"description":6},[132,133],{"label":36,"url":101},{"label":36,"url":101},"limited partnership agreement","/template/limited-partnership-agreement-D891",{"description":137,"descriptionCustom":6,"label":138,"pages":139,"size":9,"extension":10,"preview":140,"thumb":141,"svgFrame":142,"seoMetadata":143,"parents":145,"keywords":144,"url":152},"CORPORATE GOVERNANCE POLICY PURPOSE The purpose of this Corporate Governance Policy at [YOUR COMPANY NAME] is to establish a comprehensive framework for the governance of the organization. This policy ensures that the company is managed in an ethical, transparent, and accountable manner, aligning with regulatory requirements and best practices in corporate governance. It aims to promote the long-term interests of shareholders, while taking into account the interests of other stakeholders, including employees, customers, suppliers, and the community. CORPORATE GOVERNANCE PRINCIPLES Accountability: Ensure the company is accountable to its shareholders and stakeholders. This includes regular reporting, transparent decision-making processes, and a robust system of checks and balances. Transparency: Provide clear and timely information about the company's activities, performance, and governance. This involves regular disclosures, financial reporting, and open communication channels. Integrity: Conduct business with honesty and integrity, adhering to ethical standards. This includes fostering a culture of ethical behavior and ensuring that all employees understand and follow the company's code of conduct. Fairness: Treat all stakeholders fairly and equitably. This means providing equal opportunities, preventing conflicts of interest, and ensuring that decisions are made impartially. Responsibility: Ensure the company meets its legal and regulatory obligations and operates sustainably. This involves maintaining compliance with all applicable laws and regulations and implementing policies that promote social and environmental responsibility. BOARD OF DIRECTORS Composition: The Board shall consist of [NUMBER] members, including a mix of executive and non-executive directors. A majority of the Board members shall be independent directors to ensure objectivity and prevent conflicts of interest. The Board shall include a diverse mix of skills, experience, and backgrounds to provide comprehensive oversight and strategic direction. Roles and Responsibilities: Strategic Guidance: Provide strategic guidance and oversight of the company's management. This includes setting the company's strategic goals and monitoring their implementation. Policy Approval: Approve major corporate plans, budgets, and policies. This ensures that all significant decisions are aligned with the company's strategic direction. Performance Monitoring: Monitor the performance of the CEO and senior management. This involves regular evaluations and feedback to ensure effective leadership. Compliance Oversight: Ensure the company's compliance with legal and regulatory requirements. This includes establishing internal controls and monitoring their effectiveness. Committees: Audit Committee: Responsible for overseeing the financial reporting process, internal controls, and the audit process. Compensation Committee: Determines executive compensation and ensures it aligns with the company's performance and strategic goals. Nomination and Governance Committee: Oversees Board composition, development, and governance practices. Establish additional committees as necessary to address specific issues or areas of concern. EXECUTIVE MANAGEMENT CEO and Senior Management: The CEO is responsible for the overall management of the company, implementing the Board's policies and strategies, and ensuring operational efficiency. Senior management supports the CEO in implementing the company's strategic and operational plans, managing day-to-day operations, and ensuring that all activities comply with internal policies and external regulations. Ensure effective communication between the Board and executive management to facilitate informed decision-making and alignment of goals. SHAREHOLDER RIGHTS Protect the rights of shareholders and ensure equitable treatment. This includes facilitating the effective exercise of voting rights and providing mechanisms for shareholders to express their views and concerns.","Corporate Governance Policy","5","https://templates.business-in-a-box.com/imgs/1000px/corporate-governance-policy-D13943.png","https://templates.business-in-a-box.com/imgs/250px/13943.png","https://templates.business-in-a-box.com/svgs/docviewerWebApp1.html?v6#13943.xml",{"title":144,"description":6},"corporate governance policy",[146,149],{"label":147,"url":148},"Human Resources","human-resources",{"label":150,"url":151},"Company Policies","company-policies","/template/corporate-governance-policy-D13943",{"description":154,"descriptionCustom":6,"label":155,"pages":156,"size":157,"extension":10,"preview":158,"thumb":159,"svgFrame":160,"seoMetadata":161,"parents":162,"keywords":165,"url":166},"BY-LAWS OF [NOT FOR PROFIT CORPORATION] These By-Laws of [YOUR COMPANY NAME] (the \"Agreement\") are made and effective [DATE]. ORGANIZATION The name of the organization shall be [NAME]. The organization may at its pleasure by a vote of the membership body change its name. PURPOSES The following are the purposes for which this organization has been organized: [DESCRIBE] MEMBERSHIP Membership in this organization shall be open to all who [DESCRIBE]. MEETINGS The annual membership meeting of this organization shall be held on the [DAY] of [MONTH] each and every year except if such day be a legal holiday, then and in that event, the Board of Directors shall fix the day but it shall not be more than two weeks from the date fixed by these By-Laws. The Secretary shall cause to be mailed to every member in good standing at his address as it appears in the membership roll book in this organization a notice telling the time and place of such annual meeting. Regular meetings of this organization shall be held [LOCATION]. The presence of not less than [%] of the members shall constitute a quorum and shall be necessary to conduct the business of this organization; but a lesser percentage may adjourn the meeting for a period of not more than [NUMBER] weeks from the date scheduled by these By-Laws and the secretary shall cause a notice of this scheduled meeting to be sent to all those members who were not present at the meeting originally called. A quorum as herein before set forth shall be required at any adjourned meeting. Special meetings of this organization may be called by the president when he deems it for the best interest of the organization. Notices of such meeting shall be mailed to all members at their addresses as they appear in the membership roll book at least [NUMBER] days before the scheduled date set for such special meeting. Such notice shall state the reasons that such meeting has been called, the business to be transacted at such meeting and by whom it was called. At the request of [%] of the members of the Board of Directors or [%] of the members of the organization, the president shall cause a special meeting to be called but such request must be made in writing at least [NUMBER] days before the requested scheduled date. No other business but that specified in the notice may be transacted at such special meeting without the unanimous consent of all present at such meeting. VOTING At all meetings, except for the election of officers and directors, all votes shall be by voice. For election of officers, ballots shall be provided and there shall not appear any place on such ballot that might tend to indicate the person who cast such ballot. At any regular or special meeting, if a majority so requires, any question may be voted upon in the manner and style provided for election of officers and directors. At all votes by ballot the chairman of such meeting shall, prior to the commencement of balloting, appoint a committee of three who shall act as \"Inspectors of Election\" and who shall, at the conclusion of such balloting, certify in writing to the chairman the results and the certified copy shall be physically affixed in the minute book to the minutes of that meeting. No inspector of election shall be a candidate for office or shall be personally interested in the question voted upon. ORDER OF BUSINESS 1. Roll Call. 2. Reading of the Minutes of the preceding meeting. 3. Reports of Committees. 4. Reports of Officers. 5. Old and Unfinished Business. 6. New Business. 7. Adjournments. BOARD OF DIRECTORS The business of this organization shall be managed by a Board of Directors consisting of [#] members, together with the officers of this organization. At least one of the directors elected shall be a resident of the State of [STATE/PROVINCE] and a citizen of [COUNTRY]. The directors to be chosen for the ensuing year shall be chosen at the annual meeting of this organization in the same manner and style as the officers of this organization and they shall serve for a term of [NUMBER] years. The Board of Directors shall have the control and management of the affairs and business of this organization. Such Board of Directors shall only act in the name of the organization when it shall be regularly convened by its chairman after due notice to all the directors of such meeting. [%] of the members of the Board of Directors shall constitute a quorum and the meetings of the Board of Directors shall be held regularly on the [DATE]. Each director shall have one vote and such voting may not be done by proxy. The Board of Directors may make such rules and regulations covering its meetings as it may in its discretion determine necessary.","Bylaws Not for Profit Corporation","4",51,"https://templates.business-in-a-box.com/imgs/1000px/bylaws_not-for-profit-corporation-D1004.png","https://templates.business-in-a-box.com/imgs/250px/1004.png","https://templates.business-in-a-box.com/svgs/docviewerWebApp1.html?v6#1004.xml",{"title":6,"description":6},[163,164],{"label":36,"url":101},{"label":103,"url":104},"bylaws not for profit corporation","/template/bylaws-not-for-profit-corporation-D1004",{"description":168,"descriptionCustom":6,"label":169,"pages":170,"size":9,"extension":10,"preview":171,"thumb":172,"svgFrame":173,"seoMetadata":174,"parents":176,"keywords":175,"url":179},"SHAREHOLDERS AGREEMENT This Shareholders Agreement (the \"Agreement\") is made and effective [DATE], BETWEEN: [YOUR COMPANY NAME] (the \"Company\"), a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [YOUR COMPLETE ADDRESS] AND: [FIRST SHAREHOLDER NAME] (the \"First Shareholder\"), an individual with his main address located at OR a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [COMPLETE ADDRESS] AND: [SECOND SHAREHOLDER NAME] (the \"Second Shareholder\"), an individual with his main address located at OR a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [COMPLETE ADDRESS] AND: [THIRD SHAREHOLDER NAME] (the \"Third Shareholder\"), an individual with his main address located at OR a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [COMPLETE ADDRESS] WITNESSETH: WHEREAS, the present distribution of shares of the Company is as follows: Name Number of Shares WHEREAS, in order to insure the harmonious and successful management and control of the Company, and to provide for an orderly and fair disposition of shares of common stock of the Company now or hereafter owned by any Shareholder; NOW, THEREFORE, in consideration of the mutual promises of the parties hereto, and intending to be legally bound, the parties hereby agree as follows: Definitions and organisation of the company \"Offering Shareholder\" means any Shareholder, or his personal representatives, heirs, administrators, and executors, as the case may be, who pursuant to this Agreement must or does offer all or any of his Shares to the Company or the Continuing Shareholders. \"Continuing Shareholders\" means all Shareholders other than an Offering Shareholder. \"Shares\" means shares of Common Stock of the Company now or hereafter owned by any Shareholder. \"Buyer\" means the Company or those Continuing Shareholders who purchase an Offering Shareholder's Shares pursuant to this Agreement. \"Management Shareholder\" means First Shareholder, Second Shareholder and Third Shareholder. ORGANISATION OF THE COMPANY The affairs of the Company will be managed by a board of [NUMBER] directors unless changed by a unanimous Directors' Resolution. The present directors of the Company are [DIRECTORS' NAMES]. It is agreed that [SHAREHOLDERS' NAMES] shall each be entitled to elect one director to the board of directors of the Company so long as each is a Shareholder. Two (2) directors shall constitute a quorum for the transaction of any business at any meeting of the board of directors. At all meetings of the board of directors, every motion to be carried must receive a majority of the votes cast, subject to the provisions of subparagraphs 2.4 and 2.5. Unless otherwise agreed, board meetings will be held at the head office of the Company. In the event that a nominee to the Board of one of the Shareholders shall fail to vote and act as a director to carry out the provisions of this agreement, then the shareholders agree to exercise their right as shareholders of the Company and in accordance with the Articles of the Company to remove such nominee from the Board and to elect in the place or stead thereof such individual who will use his/her best efforts to carry out the provisions of this agreement but only in the event that the Shareholder whose nominee has been removed fails to appoint a successor within a period of fourteen days from the date such nominee has been removed. The election, appointment and determination of officers and the auditors and advisors of the Company, the defining of their duties and functions and the salaries and remuneration to be paid to them will be a function of the board of directors. Until changed by the board of directors, the Officers of the Company and their annual salaries shall be: Office Held: Director: [NAME] [SALARY] Secretary: [NAME] [SALARY] All direct out-of-pocket expenses will be reimbursed provided these falls within guidelines set out by the Board of Directors from time to time. Until otherwise agreed, each officer of the Company will commit to spending his/her full time on the affairs of the Company. Until changed by the board of directors, the auditors and advisors of the Company shall be: Auditor: Legal Advisors: There shall be kept, in such bank or banks (including trust companies) as may be determined by the board of directors, bank accounts of the Company in which shall be deposited all monies received by the Company in the course of carrying on business from time to time. All payments on account of the Company shall be made by cheques drawn on the bank account and all cheques, drafts or other instruments drawn and made for the purposes of the business of the Company shall be executed by such directors, officers or employees as may from time to time be authorized so to do by the board of directors. Subject to paragraph 2.6, all decisions relating to the management and control of the business of the Company shall be determined by the board of directors of the Company, provided always that the following matters shall be determined by a Special Directors' Resolution: any capital expenditures greater than xxxx; any lease commitments greater than xxxx; the acquisition of any business interests by the Company; the elections of officers of the Company; the payment of any cash dividends or stock dividends to Shareholders of the Company; the issuance of any debt obligations of the Company; the disposal of the whole or any part of the business, undertaking, or assets of the Company outside the normal course of business of the Company the transfer of any shares of the Company; changes or variations in the objects or powers of the Company; the liquidation or winding up of the Company; the approval of any contracts or transactions outside the normal course of business; the execution of any contract involving a consideration greater than xxxx within the normal course of business; the lending of money by the Company; the guarantee by the Company of the debts or obligations of any other person, firm or body corporate; any non-budgeted expenditures greater than xxxx; business plan and/or budgets. The following decisions shall be determined by a Unanimous Directors' Resolution: alterations, variations or changes to the authorized or issued capital of the Company; the salaries and bonuses of officers and directors of the Company; the issue, redemption or purchase of any Shares; and changes in the number of directors of the Company The Shareholders may pledge any of their Shares as security for any borrowings by them provided the pledgee executes an agreement, in writing, providing that the pledgee shall be subject to all of the terms of this Agreement. The board of directors shall meet at least four times during each fiscal year of the Company. Any director can call a meeting provided 10 days notice is given. Notice may be waived. During the first year from the date of this agreement, the board of directors shall meet on a monthly basis. Directors may elect to attend a board meeting by telephone conference call. Each Shareholder shall, for so long as s/he is the owner of shares of the Company devote such of his/her business, time and energy as may be reasonably required to carry on the business of the Company and the Shareholder shall use his/her best efforts, skill and abilities to promote the interests of the Company. Each Shareholder agrees that he/she will not engage, without the consent of the other Shareholders, in a business which is directly competitive to that of the Company. Purchase for Investment","Shareholders Agreement","16","https://templates.business-in-a-box.com/imgs/1000px/shareholders-agreement-D1016.png","https://templates.business-in-a-box.com/imgs/250px/1016.png","https://templates.business-in-a-box.com/svgs/docviewerWebApp1.html?v6#1016.xml",{"title":175,"description":6},"shareholders agreement",[177,178],{"label":36,"url":101},{"label":103,"url":104},"/template/shareholders-agreement-D1016",false,{"seo":182,"reviewer":195,"legal_disclaimer":199,"quick_facts":200,"at_a_glance":202,"personas":206,"variants":231,"glossary":258,"clauses":292,"how_to_fill":343,"common_mistakes":384,"faqs":409,"industries":440,"comparisons":465,"diy_vs_lawyer":479,"jurisdictions":492,"related_template_ids_curated":513,"schema":520,"classification":521},{"meta_title":183,"meta_description":184,"primary_keyword":185,"secondary_keywords":186},"Different Business Structures Explained | BIB","Free guide to business structures: sole proprietorship, partnership, LLC, corporation, and more. Compare liability, tax, and governance.","business structures explained",[187,188,189,190,191,192,193,194],"different business structures","types of business structures","business entity types","sole proprietorship vs llc vs corporation","choosing a business structure","business structure comparison","business formation guide","legal business structures word template",{"name":196,"credential":197,"reviewed_date":198},"Bruno Goulet","CEO, Business in a Box","2026-05-02",true,{"difficulty":201,"legal_review_recommended":199,"signature_required":199,"notarization_required":180},"advanced",{"what_it_is":203,"when_you_need_it":204,"whats_inside":205},"Different Business Structures Explained is a structured reference and decision-support document that compares every major legal entity type — sole proprietorship, general partnership, limited partnership, LLC, S corporation, C corporation, and nonprofit — across liability, taxation, governance, and formation requirements. This free Word download gives founders, advisors, and operators a single editable reference they can annotate, share with counsel, or use as the basis for an entity-selection memo before filing formation documents.\n","Use it when launching a new venture and choosing a legal entity, when restructuring an existing business to optimize for tax or liability, or when advising a client on the trade-offs between entity types before filing articles of incorporation or organization.\n","Side-by-side comparison tables for all major entity types, plain-English explanations of personal liability exposure, pass-through versus double taxation, governance and ownership rules, formation requirements by jurisdiction, and a decision checklist that maps business goals to the most appropriate structure.\n",[207,211,215,219,223,227],{"title":208,"use_case":209,"icon_asset_id":210},"First-time founders","Deciding between sole proprietorship, LLC, and S corp before launch","persona-startup-founder",{"title":212,"use_case":213,"icon_asset_id":214},"Small business owners","Restructuring an existing sole proprietorship to reduce personal liability","persona-small-business-owner",{"title":216,"use_case":217,"icon_asset_id":218},"Business attorneys and advisors","Walking clients through entity options with a structured reference document","persona-attorney",{"title":220,"use_case":221,"icon_asset_id":222},"Accountants and CPAs","Illustrating tax implications of different entity elections for new clients","persona-accountant",{"title":224,"use_case":225,"icon_asset_id":226},"MBA students and entrepreneurs","Completing a business formation course or preparing a startup legal memo","persona-student-entrepreneur",{"title":228,"use_case":229,"icon_asset_id":230},"Operations directors","Evaluating entity restructuring before a capital raise or acquisition","persona-operations-director",[232,236,239,243,247,251,254],{"situation":233,"recommended_template":234,"slug":235},"Starting a one-person business with minimal administrative burden","Sole Proprietorship Setup Checklist","checklist-how-to-setup-an-llc-D12995",{"situation":237,"recommended_template":92,"slug":238},"Forming an LLC with multiple members","llc-operating-agreement-D5209",{"situation":240,"recommended_template":241,"slug":242},"Launching a C corporation for venture capital funding","Corporate Bylaws","corporate-governance-policy-D13943",{"situation":244,"recommended_template":245,"slug":246},"Creating a partnership between two or more co-founders","General Partnership Agreement","partnership-agreement-D12551",{"situation":248,"recommended_template":249,"slug":250},"Establishing a nonprofit organization","Nonprofit Bylaws","bylaws-not-for-profit-corporation-D1004",{"situation":252,"recommended_template":124,"slug":253},"Forming a limited partnership with passive investors","limited-partnership-agreement-D891",{"situation":255,"recommended_template":256,"slug":257},"Choosing between S corp and C corp for tax optimization","S Corporation Shareholders Agreement","shareholders-agreement-D1016",[259,262,265,268,271,274,277,280,283,286,289],{"term":260,"definition":261},"Sole Proprietorship","A business owned and operated by a single individual with no legal separation between the owner and the business entity.",{"term":263,"definition":264},"Limited Liability Company (LLC)","A hybrid entity that provides personal liability protection for its members while allowing pass-through taxation and flexible governance.",{"term":266,"definition":267},"Pass-Through Taxation","A tax treatment in which business profits and losses flow directly to the owners' personal tax returns, avoiding a separate entity-level tax.",{"term":269,"definition":270},"Double Taxation","The taxation of corporate profits first at the corporate level and again at the shareholder level when dividends are distributed — the default for C corporations.",{"term":272,"definition":273},"Piercing the Corporate Veil","A court action that holds business owners personally liable for company debts when they fail to observe proper corporate formalities or commingle personal and business funds.",{"term":275,"definition":276},"Articles of Incorporation","The foundational filing document that legally creates a corporation with the state or provincial government, stating the entity's name, purpose, and authorized shares.",{"term":278,"definition":279},"Operating Agreement","An LLC's internal governance document that defines member ownership percentages, voting rights, profit distribution, and management structure.",{"term":281,"definition":282},"S Corporation Election","An IRS tax designation that allows a corporation to be taxed as a pass-through entity, subject to restrictions on the number and type of shareholders.",{"term":284,"definition":285},"General Partner","A partner in a general or limited partnership who has unlimited personal liability for partnership debts and active management authority.",{"term":287,"definition":288},"Registered Agent","A person or company designated to receive legal notices, tax forms, and official government correspondence on behalf of a business entity.",{"term":290,"definition":291},"Fiduciary Duty","The legal obligation of directors, officers, or managing members to act in the best interests of the entity and its owners rather than in their own self-interest.",[293,298,303,308,313,318,323,328,333,338],{"name":294,"plain_english":295,"sample_language":296,"common_mistake":297},"Entity type overview and definitions","Defines each recognized business structure — sole proprietorship, general partnership, limited partnership, LLC, S corp, C corp, and nonprofit — in plain language with their distinguishing characteristics.","A Limited Liability Company ([STATE] LLC) is a legal entity formed under [STATE] LLC Act, Chapter [X], that separates the personal assets of its members from the debts and obligations of the business.","Conflating an LLC with a corporation in the definitions section — they are governed by different statutes, have different governance requirements, and offer different tax flexibility. Mixing the two leads to incorrect formation and compliance steps.",{"name":299,"plain_english":300,"sample_language":301,"common_mistake":302},"Personal liability exposure comparison","Compares how each structure exposes owners to personal liability for business debts, lawsuits, and obligations — from unlimited exposure in sole proprietorships to limited exposure in LLCs and corporations.","Under a Sole Proprietorship, [OWNER NAME] is personally liable for all debts, judgments, and obligations of the business without limit. Under an LLC or corporation, members or shareholders are generally not personally liable beyond their capital contribution, provided corporate formalities are observed.","Assuming that forming an LLC automatically eliminates all personal liability. Courts can pierce the corporate veil if owners commingle funds, fail to capitalize the entity adequately, or ignore governance requirements.",{"name":304,"plain_english":305,"sample_language":306,"common_mistake":307},"Taxation treatment by entity type","Explains how each entity is taxed — pass-through for sole proprietorships, partnerships, and LLCs; pass-through by election for S corps; double taxation for C corps — and the self-employment tax implications for each.","A sole proprietorship reports all business income and expenses on Schedule C of the owner's Form 1040. An LLC with two or more members is treated as a partnership by default and files Form 1065, with each member receiving a Schedule K-1.","Ignoring self-employment tax when comparing pass-through entities. A sole proprietor or general partner pays 15.3% SE tax on net earnings — an LLC member who performs active services faces the same burden unless an S corp election is made.",{"name":309,"plain_english":310,"sample_language":311,"common_mistake":312},"Formation and registration requirements","Lists the filing documents, state or provincial registrations, filing fees, and timelines required to legally establish each entity type.","To form an LLC in [STATE], the organizer must file Articles of Organization with the [STATE] Secretary of State, pay a filing fee of $[AMOUNT], designate a registered agent with a [STATE] address, and — in most states — publish a notice of formation within [X] days.","Treating formation as complete at the state filing stage. Most jurisdictions also require a federal EIN, an operating agreement or bylaws, an initial meeting resolution, and separate bank accounts before the entity is operationally compliant.",{"name":314,"plain_english":315,"sample_language":316,"common_mistake":317},"Ownership and equity structure","Describes how ownership is held and transferred in each structure — membership interests for LLCs, shares for corporations, and partnership interests for general and limited partnerships — and the restrictions that apply.","A C corporation issues [NUMBER] shares of common stock at $[PAR VALUE] per share. Shares may be transferred subject to a right of first refusal in favor of existing shareholders as set out in the Shareholders Agreement dated [DATE].","Launching a corporation without documenting the initial share issuance. Undocumented founder equity leads to cap table disputes, broken 83(b) elections, and complications during due diligence for any subsequent funding round.",{"name":319,"plain_english":320,"sample_language":321,"common_mistake":322},"Governance and management structure","Outlines who runs the business day-to-day — managers or members for LLCs, a board of directors and officers for corporations, general partners for partnerships — and the decision-making authority each holds.","The LLC shall be managed by [MEMBER-MANAGED / MANAGER-MANAGED]. In a manager-managed LLC, [MANAGER NAME] has authority to bind the Company in contracts up to $[THRESHOLD] without member approval. Contracts exceeding $[THRESHOLD] require approval of members holding at least [X]% of interests.","Defaulting to member-managed for a multi-member LLC without considering operational implications. When all members can legally bind the company, a single member's unauthorized contract can expose the entire entity — designating a manager limits this risk.",{"name":324,"plain_english":325,"sample_language":326,"common_mistake":327},"Compliance and ongoing obligations","Summarizes the annual reporting, minutes, fees, tax filings, and regulatory obligations required to keep each entity in good standing with state, federal, and local authorities.","The Corporation shall hold an annual meeting of shareholders no later than [DATE] each year, maintain written minutes of all board and shareholder meetings, file an Annual Report with the [STATE] Secretary of State by [DATE], and pay the annual franchise tax of $[AMOUNT] by [DATE].","Skipping annual meeting minutes and resolutions for small closely-held corporations. Courts treat the absence of corporate minutes as evidence that the entity is an alter ego of its owners — the primary basis for piercing the corporate veil.",{"name":329,"plain_english":330,"sample_language":331,"common_mistake":332},"Conversion and restructuring provisions","Addresses how a business can convert from one entity type to another — e.g., sole proprietorship to LLC, LLC to S corp, or C corp to LLC — and the tax and legal consequences of each conversion.","The LLC may convert to a corporation under [STATE] conversion statute by filing a Certificate of Conversion and Articles of Incorporation, subject to a member vote of [X]% approval. The conversion is treated as a tax-free reorganization under IRC §368(a) if [CONDITIONS] are met.","Converting a C corporation to an LLC without analyzing the built-in gains tax. The conversion is treated as a deemed liquidation — triggering corporate-level tax on appreciated assets — which can result in significant unexpected tax liability.",{"name":334,"plain_english":335,"sample_language":336,"common_mistake":337},"Dissolution and winding up","Covers the process for legally dissolving each entity type — filing dissolution documents, settling debts, distributing remaining assets to owners, and notifying tax authorities.","Upon dissolution, the LLC shall (a) file Articles of Dissolution with the [STATE] Secretary of State, (b) notify all known creditors in writing within [X] days, (c) liquidate assets sufficient to satisfy all outstanding obligations, and (d) distribute remaining assets to members in proportion to their membership interests.","Abandoning a business entity without formally dissolving it. An entity that continues to exist on state records accumulates annual report obligations, franchise taxes, and potential penalties — which become the personal liability of the registered agent or last known officer.",{"name":339,"plain_english":340,"sample_language":341,"common_mistake":342},"Entity selection decision checklist","A structured checklist that maps the owner's goals — liability protection, tax minimization, investor readiness, administrative simplicity, employee ownership — to the entity type best suited for each objective.","If your primary goals are: (1) personal liability protection — YES, (2) pass-through taxation — YES, (3) raising venture capital — NO → Recommended structure: LLC with S corp election. If raising venture capital — YES → Recommended structure: C corporation (Delaware preferred).","Choosing an entity type based solely on formation cost. A sole proprietorship costs nothing to start but offers no liability protection and may cost far more in taxes and litigation exposure over a five-year horizon than the $300–$800 cost of forming an LLC.",[344,349,354,359,364,369,374,379],{"step":345,"title":346,"description":347,"tip":348},1,"Identify your primary business goals","Before completing any section, list your three to five most important objectives — liability protection, tax efficiency, investor readiness, administrative simplicity, employee ownership plans — in order of priority. These drive every entity-selection decision.","If you cannot rank your objectives, the entity selection section will be inconclusive. Force-rank them even if priorities feel equal.",{"step":350,"title":351,"description":352,"tip":353},2,"Complete the entity type overview for your jurisdiction","Confirm which entity types are available in your operating state or province. Most US states offer all major types, but availability and governing statutes differ — Wyoming LLCs, for example, have stronger charging-order protection than California LLCs.","Delaware is the default for venture-backed C corporations and offers predictable case law. For operating businesses with no outside investors, form in your home state to avoid dual-state compliance costs.",{"step":355,"title":356,"description":357,"tip":358},3,"Fill in the liability comparison for your specific situation","For each entity type you are considering, document your personal assets at risk (home, savings, other investments) and the realistic worst-case liability exposure of the business (client claims, product liability, lease obligations). The gap between the two determines how much liability protection you need.","Professional service providers — doctors, lawyers, accountants — face personal malpractice liability that an LLC cannot fully shield. A professional corporation (PC) or professional LLC (PLLC) may be required by state licensing boards.",{"step":360,"title":361,"description":362,"tip":363},4,"Map the tax treatment section to your income projections","Estimate first-year and third-year net income for the business. For incomes above $50,000–$80,000, compare the self-employment tax savings of an S corp election against the additional compliance costs of payroll and a separate corporate return.","An S corp election only generates meaningful tax savings when net profit exceeds roughly $40,000–$60,000 above a reasonable owner salary. Below that threshold, the added compliance cost outweighs the savings.",{"step":365,"title":366,"description":367,"tip":368},5,"Document the formation requirements for your chosen structure","List every filing, fee, and deadline required in your state or province for the entity type you are selecting. Include the federal EIN application, state tax registrations, business licenses, and any publication requirements.","Some states — New York and Arizona — require LLCs to publish a formation notice in designated newspapers, a requirement that can cost $200–$2,000 depending on the county.",{"step":370,"title":371,"description":372,"tip":373},6,"Record governance and compliance obligations","For the chosen entity, list every annual obligation: annual report filing date and fee, meeting and minutes requirements, tax filing deadlines (Form 1065, 1120, or 1120-S), and state franchise tax due dates.","Set calendar reminders for every compliance deadline the moment you form the entity. Missed annual reports result in administrative dissolution — which terminates the liability protection you paid to create.",{"step":375,"title":376,"description":377,"tip":378},7,"Run the decision checklist and document your selection","Complete the entity selection checklist by answering each goal-mapping question. Record the recommended structure, the rationale, and any conditions or caveats — for example, 'LLC now, convert to C corp if raising Series A within 24 months.'","Document this reasoning in writing even if you are the sole decision-maker. It provides a record for your attorney, accountant, and any future investors or partners who ask why the entity was structured as it was.",{"step":380,"title":381,"description":382,"tip":383},8,"Review with a business attorney and CPA before filing","Use the completed document as the agenda for a one-hour joint session with a business attorney and CPA. Confirm the entity selection, formation steps, and tax elections before spending money on any filings.","A combined attorney-CPA review typically costs $300–$800 and surfaces jurisdiction-specific issues — such as California's $800 annual LLC minimum franchise tax — that a template cannot anticipate.",[385,389,393,397,401,405],{"mistake":386,"why_it_matters":387,"fix":388},"Choosing an entity based only on formation cost","A sole proprietorship costs nothing to start but exposes personal assets to unlimited liability and may generate a higher lifetime tax burden than an LLC or S corp over five years.","Model a five-year total cost of ownership for each entity option — formation fees, annual compliance, and estimated tax liability — before deciding. The cheapest structure at formation is rarely the cheapest over time.",{"mistake":390,"why_it_matters":391,"fix":392},"Skipping corporate formalities after formation","Courts disregard entity liability protection when owners commingle personal and business funds, skip annual meetings, or fail to document major decisions in writing — exposing personal assets to business creditors.","Open a dedicated business bank account on day one, hold annual meetings, document resolutions for significant transactions, and file all required annual reports on time.",{"mistake":394,"why_it_matters":395,"fix":396},"Making an S corp election without analyzing shareholder eligibility","S corporations are limited to 100 shareholders, all of whom must be US citizens or permanent residents — a single ineligible shareholder automatically terminates the S election, triggering a retroactive C corp tax liability.","Confirm every current and prospective shareholder meets IRS eligibility requirements before filing Form 2553. Review the shareholder list annually and before any equity transfer.",{"mistake":398,"why_it_matters":399,"fix":400},"Abandoning a business entity without formal dissolution","An entity that remains on state records accumulates annual fees, tax obligations, and potential penalties indefinitely — and those liabilities can attach to the last registered officer or agent.","File articles of dissolution, settle all outstanding debts, close tax accounts with the IRS and state revenue agency, and confirm the state has issued a certificate of dissolution before considering the entity closed.",{"mistake":402,"why_it_matters":403,"fix":404},"Forming in Delaware without understanding dual-state compliance","A Delaware entity that operates in another state must register as a foreign entity in that state, pay that state's franchise tax, and file tax returns there — doubling compliance costs for small businesses with no Delaware operations.","Form in Delaware only when you genuinely need Delaware's corporate law advantages — typically for venture-backed C corporations. For operating businesses without outside investors, form in your home state.",{"mistake":406,"why_it_matters":407,"fix":408},"Selecting an LLC for a venture-backed startup","Most institutional venture capital funds cannot legally invest in pass-through entities due to UBTI (unrelated business taxable income) restrictions. An LLC structure can disqualify a company from receiving VC investment entirely.","If a venture capital raise is in your 12–24 month horizon, form a Delaware C corporation from the start or plan and budget for the conversion before approaching investors.",[410,413,416,419,422,425,428,431,434,437],{"question":411,"answer":412},"What are the main types of business structures?","The main business structures are sole proprietorship, general partnership, limited partnership, limited liability company (LLC), S corporation, C corporation, and nonprofit organization. Each differs in personal liability exposure, tax treatment, governance requirements, and the administrative burden of ongoing compliance. The right choice depends on your industry, income level, liability exposure, and whether you plan to raise outside capital.\n",{"question":414,"answer":415},"What is the difference between an LLC and a corporation?","An LLC is a flexible pass-through entity governed by an operating agreement — it avoids double taxation and has fewer formal governance requirements than a corporation. A corporation issues shares of stock, is governed by a board of directors and bylaws, and — unless an S corp election is made — pays corporate income tax before distributing dividends to shareholders, who are taxed again on those distributions. Corporations are the preferred structure for venture-backed startups; LLCs are often better for small businesses and professional service firms.\n",{"question":417,"answer":418},"What is pass-through taxation and why does it matter?","Pass-through taxation means the business itself does not pay income tax. Instead, profits and losses flow through to the owners' personal tax returns and are taxed at their individual rates. Sole proprietorships, partnerships, LLCs, and S corporations all receive pass-through treatment by default or election. C corporations do not — they pay a 21% federal corporate tax on profits, and shareholders pay personal income tax again on any dividends received. For small profitable businesses, pass-through treatment typically results in a lower combined tax burden.\n",{"question":420,"answer":421},"Which business structure offers the best personal liability protection?","LLCs and corporations provide the strongest personal liability protection, shielding members or shareholders from business debts and lawsuits beyond their capital contribution — as long as corporate formalities are observed. Sole proprietorships and general partnerships offer no separation between personal and business assets. The protection is not absolute: courts can pierce the corporate veil if owners commingle funds, ignore governance requirements, or undercapitalize the entity.\n",{"question":423,"answer":424},"When should I choose a C corporation instead of an LLC?","Choose a C corporation when you plan to raise venture capital, issue preferred stock to multiple investor classes, grant stock options to employees under an ISO plan, or seek a Delaware-incorporated entity that investors and acquirers expect. Most institutional VCs cannot invest in pass-through entities, making a C corporation effectively mandatory for companies on a venture-funding path. Delaware C corporations are the overwhelming standard because of Delaware's predictable corporate law and experienced courts.\n",{"question":426,"answer":427},"What is an S corporation and who qualifies?","An S corporation is a C corporation that has elected pass-through tax treatment under Subchapter S of the Internal Revenue Code. It avoids double taxation while maintaining corporate liability protection and allowing owner-employees to reduce self-employment tax by splitting income between a reasonable salary and a profit distribution. To qualify, the corporation must have 100 or fewer shareholders, all of whom must be US citizens or permanent residents, and may issue only one class of stock. Foreign nationals, corporations, and most trusts are ineligible shareholders.\n",{"question":429,"answer":430},"Do I need a lawyer to choose a business structure?","For straightforward sole proprietorships and single-member LLCs in low-liability industries, a high-quality template and basic research are often sufficient. However, for multi-member entities, corporations, professional service providers, businesses with significant liability exposure, or any situation involving venture capital or complex tax elections, consulting a business attorney and CPA before filing is strongly recommended. The cost of a one-hour joint consultation ($300–$800) is far lower than correcting a misclassified entity or a botched tax election after the fact.\n",{"question":432,"answer":433},"Can I change my business structure after formation?","Yes, but the process and tax consequences vary significantly. Converting a sole proprietorship or partnership to an LLC is straightforward in most states and typically tax-neutral. Converting a C corporation to an LLC is treated as a deemed liquidation for tax purposes — potentially triggering corporate-level tax on appreciated assets. Converting an LLC to a C corporation can be done tax-free under IRC §368 if structured correctly. Always consult a CPA before initiating any conversion to model the tax impact.\n",{"question":435,"answer":436},"What is the difference between a general partnership and a limited partnership?","In a general partnership, all partners share unlimited personal liability for the partnership's debts and have equal management authority. In a limited partnership, there is at least one general partner with unlimited liability and management control, and one or more limited partners whose liability is capped at their capital contribution but who have no active management role. Limited partnerships are commonly used for real estate investment and private equity fund structures where passive investors want liability protection without governance rights.\n",{"question":438,"answer":439},"What ongoing compliance is required after forming a business entity?","Ongoing requirements vary by entity type and state but typically include: filing an annual report and paying a franchise tax or annual fee to the state of formation, holding annual meetings and maintaining written minutes (for corporations), maintaining a registered agent, filing the appropriate federal and state tax returns (Form 1065 for partnerships, 1120 for C corps, 1120-S for S corps), and updating the registered agent or principal address as needed. Failure to meet these requirements can result in administrative dissolution and the loss of liability protection.\n",[441,445,449,453,457,461],{"industry":442,"icon_asset_id":443,"specifics":444},"Technology / SaaS","industry-saas","Delaware C corporation is the near-universal choice for venture-backed SaaS companies because of investor expectations, ISO stock option plans, and the ability to issue multiple share classes to investors.",{"industry":446,"icon_asset_id":447,"specifics":448},"Professional Services","industry-professional-services","Attorneys, physicians, and accountants often must use a professional corporation (PC) or professional LLC (PLLC) as required by state licensing boards, which limits standard LLC or corporate protections for malpractice claims.",{"industry":450,"icon_asset_id":451,"specifics":452},"Real Estate","industry-real-estate","Real estate investors commonly use single-asset LLCs for each property to isolate liability, with a holding LLC or S corp above them to manage distributions and protect against cross-property claims.",{"industry":454,"icon_asset_id":455,"specifics":456},"Retail / E-commerce","industry-retail","Single-member or multi-member LLCs are the dominant structure for retail and e-commerce businesses — they provide liability protection without the governance overhead of a corporation, and an S corp election becomes tax-advantageous once net profit exceeds approximately $60,000 annually.",{"industry":458,"icon_asset_id":459,"specifics":460},"Food and Beverage","industry-food-beverage","Restaurant and food-service operators typically use LLCs for each location to isolate slip-and-fall, food safety, and lease liabilities, while a management company LLC or S corp above the operating entities handles shared staff and back-office functions.",{"industry":462,"icon_asset_id":463,"specifics":464},"Manufacturing","industry-manufacturing","Manufacturing businesses with significant product liability exposure favor C corporations or LLCs with robust capitalization to ensure liability protection holds, and often use a holding company structure to separate IP ownership from operating assets.",[466,469,472,475],{"vs":92,"vs_template_id":467,"summary":468},"llc-operating-agreement-D13179","A business structures guide explains the trade-offs between entity types to support the initial formation decision. An LLC operating agreement is the governing document you draft after deciding to form an LLC — it defines member ownership, management authority, profit distribution, and dissolution procedures. The guide comes first; the operating agreement executes the decision.",{"vs":245,"vs_template_id":470,"summary":471},"general-partnership-agreement-D150","A business structures guide compares partnership against other entity options including LLC, corporation, and sole proprietorship. A general partnership agreement is the binding contract you use once you have chosen the partnership structure — it defines partner contributions, profit sharing, and exit terms. The guide informs the choice; the agreement governs the relationship.",{"vs":241,"vs_template_id":473,"summary":474},"corporate-bylaws-D560","A business structures guide helps you decide whether a corporation is the right entity for your situation. Corporate bylaws are the internal governance document for a corporation that has already been formed — covering board composition, officer roles, meeting procedures, and voting thresholds. Use the guide before formation; use bylaws after incorporation.",{"vs":476,"vs_template_id":477,"summary":478},"Business Plan","D{BUSINESS_PLAN_ID}","A business plan documents your market opportunity, strategy, team, and financial projections for investors or lenders. A business structures guide focuses specifically on the legal entity question — liability, tax, governance, and formation. Both are needed before launch, but they serve different audiences: the business plan speaks to capital providers; the structures guide informs the legal and tax architecture.",{"use_template":480,"template_plus_review":484,"custom_drafted":488},{"best_for":481,"cost":482,"time":483},"Sole proprietors, single-member LLC founders in low-liability industries, and students or advisors preparing a business formation overview","Free","1–2 hours to complete and review",{"best_for":485,"cost":486,"time":487},"Multi-member LLCs, S corp elections, professional service entities, or any business with employees or significant liability exposure","$300–$800 for a combined attorney and CPA review session","3–5 business days",{"best_for":489,"cost":490,"time":491},"Venture-backed corporations, complex multi-entity holding structures, cross-border formations, or businesses in heavily regulated industries","$1,500–$5,000+ depending on complexity and jurisdiction","1–3 weeks",[493,498,503,508],{"code":494,"name":495,"flag_asset_id":496,"note":497},"us","United States","flag-us","Entity types and formation rules are governed state by state — Delaware, Wyoming, and Nevada offer favorable corporate statutes and are popular for formation even when the business operates elsewhere. California imposes an $800 annual minimum franchise tax on all LLCs and corporations registered or operating there, regardless of revenue. The IRS governs federal tax elections including the S corp election (Form 2553) and the default LLC classification rules under the check-the-box regulations.",{"code":499,"name":500,"flag_asset_id":501,"note":502},"ca","Canada","flag-ca","Canadian businesses can incorporate federally under the Canada Business Corporations Act (CBCA) or provincially under each province's corporations act — Ontario's OBCA and British Columbia's BCA are most common. Canada does not have a direct equivalent to the US LLC, though limited partnerships and corporations offer comparable protection. Professional corporations are available in most provinces for regulated professions. Quebec requires all business documents to be in French for provincially-regulated entities.",{"code":504,"name":505,"flag_asset_id":506,"note":507},"uk","United Kingdom","flag-uk","The primary business structures in the UK are sole trader, general partnership, limited partnership, private limited company (Ltd), public limited company (PLC), and limited liability partnership (LLP). LLPs are popular for professional service firms — particularly law and accounting — as they provide liability protection with partnership-style governance and pass-through taxation. All companies must register with Companies House and file annual confirmation statements and accounts. UK corporations are subject to corporation tax at 25% (for profits over £250,000 as of 2023).",{"code":509,"name":510,"flag_asset_id":511,"note":512},"eu","European Union","flag-eu","Business structures are governed by each EU member state's national company law — there is no single pan-EU formation process for most entity types. Common equivalents to the US LLC include the German GmbH, French SARL, Spanish SL, and Dutch BV. The EU's Societas Europaea (SE) allows a single company to operate across member states under one registration but requires at least two founding entities from different member states. GDPR compliance obligations attach to the entity regardless of structure and must be reflected in governance documents.",[238,246,253,242,250,257,514,515,516,517,518,519],"buy-sell-agreement-D12611","employment-agreement_at-will-employee-D541","independent-contractor-agreement-D160","non-disclosure-agreement-nda-D12692","business-plan-canvas-(one-page)-D12527","articles-of-incorporation-D998",{"emit_how_to":199,"emit_defined_term":199},{"primary_folder":101,"secondary_folder":522,"document_type":523,"industry":524,"business_stage":525,"tags":526,"confidence":531},"incorporation-and-bylaws","guide","general","startup",[527,525,528,529,530],"incorporation","business-structures","entity-selection","legal-reference",0.85,"\u003Ch2>What is Different Business Structures Explained?\u003C/h2>\n\u003Cp>\u003Cstrong>Different Business Structures Explained\u003C/strong> is a structured legal reference document that compares every major business entity type — sole proprietorship, general partnership, limited partnership, LLC, S corporation, C corporation, and nonprofit — across the four dimensions that matter most when forming or restructuring a business: personal liability exposure, tax treatment, governance and ownership rules, and formation and ongoing compliance requirements. It functions as both a decision-support tool for founders choosing an entity before their first filing and a reference document for attorneys, CPAs, and advisors walking clients through the trade-offs in a structured, side-by-side format. This free Word download is fully editable, exportable as PDF, and designed to be annotated with jurisdiction-specific notes before sharing with counsel or a formation agent.\u003C/p>\n\u003Ch2>Why You Need This Document\u003C/h2>\n\u003Cp>Choosing the wrong business structure is one of the most expensive mistakes a founder can make — and it is rarely obvious until years later when a tax bill, a lawsuit, or a failed capital raise reveals the problem. A sole proprietor who should have formed an LLC faces unlimited personal liability on every contract and tort claim. An LLC owner who should have made an S corp election overpays self-employment tax by thousands of dollars per year. A startup that formed an LLC instead of a C corporation loses its first venture capital term sheet because the fund's LPA prohibits investments in pass-through entities. This document forces the entity-selection decision into a structured framework before any money is spent on formation filings — mapping your specific goals to the structure that actually serves them. It also ensures that the people advising you (your attorney and CPA) are working from the same factual baseline, reducing the risk that tax and legal advice pull in opposite directions.\u003C/p>\n",1781185971027]