An Overview of Common Business Structures among Start-ups

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Sole Proprietorship
Partnership

Limited Liability Partnership (LLP)

Company

Legal Status Not a separate entity Separate entity Separate entity
Liability Unlimited liability Limited liability Limited liability
Personal Liability Owners/Partners are personally liable for debts and losses Partners are not personally liable for debts and losses incurred by other partners Members are not personally liable for company’s debts and losses
Property Ownership Property in own name Property in LLP’s name Property in Company’s name
Taxes Profits are taxed at owners’/partners’ personal income tax rates Profits are taxed at partners’ personal income tax rates Profits are taxed at corporate tax rate
Perpetuity As long as owner is alive

Exists subject to partnership agreement

Has perpetual succession until wound up or struck off Has perpetual succession until wound up or struck off
Cessation By owners/partners – cessation of business Winding up (Voluntary or Compulsory)

Striking-off

Winding up (Voluntary or Compulsory)

Striking-off