| Foreign Corporation: A corporation doing business | | | | limited partners supplying capital investment. The |
| in a jurisdiction beyond where it was formed. | | | | limited partners are prohibited from actively |
| Microsoft is a Washington corporation. When it | | | | participating in the management of the |
| does business in New York, it is considered a | | | | partnership. In exchange, the limited partners |
| "foreign corporation." | | | | liability is limited to the amount of their |
| General Partnership: A business effort involving | | | | investment. In pursuing this business entity, the |
| two or more people, known as partners. Each | | | | general partner is almost always a corporation. |
| partner is liable for all partnership debts and | | | | Partnership by Estoppel: A partnership created by |
| obligations regardless participation and contribution | | | | operation of law when two or more people |
| amounts. Put another way, a general partnership | | | | pursue a business goal and hold themselves out to |
| provides no protection against lawsuits. | | | | the public as such. This business entity is prevalent |
| Holding Company: Part of a double incorporation | | | | as it is the automatic designation for two people |
| strategy. The sole purpose of a holding company | | | | doing business who fail to take any steps to |
| is to own or control other companies. Said other | | | | designate a business entity. In this entity, each |
| companies typically are exposed to significant | | | | partner is completely exposed to liability risks. |
| liability threats. For instance, many insurance | | | | "S" Corporation: Similar to a "C" corporation, this |
| companies use holding companies to suck off | | | | entity provides solid asset protection for |
| profits and limit lawsuit risks. | | | | shareholders from business liabilities and debts. |
| Joint Venture: A cooperative business effort | | | | The primary difference is the entity can be taxed |
| between two or more parties. It is usually limited | | | | as a pass through entity and is limited to 75 |
| to a single business purpose and involves a sharing | | | | shareholders. |
| of responsibilities and revenues. For instance, a | | | | Sole Proprietorship: A business owned and |
| database programmer and web site designer | | | | controlled by one person. The designation provides |
| might enter a joint venture to provide | | | | no protection from business liabilities. It is taxed |
| e-commerce solutions to businesses. | | | | on the person's personal tax returns on schedule |
| "LLC" - Limited Liability Company: A creation of | | | | "C". |
| state law in which one or more individuals form an | | | | Each of the above entities provides certain |
| entity providing the liability protection of a | | | | advantages to a business owner. If you consider |
| corporation, but the tax benefits of a partnership. | | | | the particulars of your efforts, you should be able |
| Limited Partnership: A partnership in which the | | | | to get an idea of which one is best for you. |
| business is managed by a general partner with | | | | |