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Enterprise refers to a business organization or unit that carries out commercial, industrial or professional activities. A company aims to organize an economical production of goods or services. Companies can be for-profit or non-profit organizations that fulfill a charitable mission or promote a social purpose. Businesses vary in size and scope, from sole proprietorships to large international corporations.

The term “business” also refers to the efforts and activities of individuals to produce and sell goods and services for profit.

Types of Companies

There are many ways to organize a business, and different legal and tax structures correspond to each of them. Companies are generally classified and structured as follows:

Sole Proprietorship – As the name suggests, a single person owns and operates a sole proprietorship. There is no legal separation between business and owner, so the business’s tax and legal obligations are the owner’s responsibility.

Partnership: A partnership is a business relationship between two or more people. Each partner contributes resources and money to the company and shares in the profits and losses of the company. Shared gains and losses remain accounted for in each partner’s tax return.

Company: A company is one in which a group of people act as a single entity. Owners are often referred to as stockholders, exchanging consideration for the company’s common stock. The formation of a company relieves the owners of the financial responsibility of economic obligations. In a corporation, unfavorable tax regulations apply to the company’s owners.

Limited Liability Company (LLC): This relatively new business structure was first available in Wyoming in 1977 and other states in the 1990s. A limited liability company combines the tax advantages of a partnership with the advantages of a limited liability corporation.

How to Start a Business?

To start a business, you need to take several steps. It includes conducting market research, developing a business plan, seeking capital or other forms of financing, selecting a location and business structure, choosing the right name, filing registration documents, obtaining tax documents (employer and taxpayer IDs), and obtaining permits and licenses. . Opening a bank account with a financial institution to facilitate your daily banking activities is also a good idea.

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