What is the Most Common Type of Corporation?
Identifying the type of business entity to form is one of the first and most important decisions to make when establishing a business.3 min read
What is the most common type of corporation available to business owners? The most common business entities include:
- Sole Proprietorships or "DBA"
- Limited Liability Companies (LLC)
- Professional Entities
Identifying the type of business entity to form is one of the first and most important decisions to make when establishing a business. The business structure you choose will affect the company's legal and tax status.
A sole proprietorship, also called a DBA (abbreviation of "doing business as") is the most basic and cheapest business structure an entrepreneur can choose when forming an enterprise. It's unincorporated and owned and operated by a single person. There is no distinction between the owner and the business. All the business profits belong to the owner. He or she is also responsible for the company's losses, debts, and obligations.
Because there is no distinction between the sole proprietorship and its owner, the business is not taxed separately. Rather, the sole proprietor files the company's profits or losses with his or her tax returns. If the sole proprietorship intends to operate under an assumed name, then it must file an assumed name certificate with the county clerk of the county where the physical business office is located. If the business has no premises, then it should file an assumed name certificate in all the counties where it operates under the assumed name.