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