Business Structure
Updated: 05 January 2025
What Does Business Structure Mean?
A business structure is a legal framework for commerce that is recognized by the law. This structure, along with the nature of the business, is often presented before a legal authority to obtain a permit to operate.
Insuranceopedia Explains Business Structure
Some of the more common business structures include sole proprietorships, partnerships, and corporations. Each business structure has distinct responsibilities, including how taxes are paid and how earnings are distributed. For instance, in a corporation, the entity itself pays the taxes, not the individual shareholders. In contrast, in a sole proprietorship, the profits and tax burden are passed on to the proprietor.
