Business Entity

A business entity is a legally recognized organization that operates to produce goods or services, distinct from its owners. It has its own rights and responsibilities, such as entering into contracts, owning property, and being liable for debts. Common types include sole proprietorships, partnerships, LLCs, and corporations. The choice of business entity affects taxes, legal liability, and management structure. Essentially, it’s a formal structure that separates the business's identity from that of its owners, providing legal clarity and protection for both the business and individuals involved.