In the US, a Business entity can be incorporated under as any of the following:
• Sole Proprietorships - The business is owned and run by a sole trader, so there is essentially no difference between the owner and the business. Since the profit and losses accrue solely to the owner, the business is exempted from taxes.
• Partnership - Partnerships are formed by two or more individuals or businesses who enter in an agreement to share the profits and losses. The partnership itself pays no taxes and is only required to file an informational report to the government declaring how the profit and losses of the partnership were allocated among the partners.
• Limited Liability Company - LLCs are highly flexible business entities where the members may or may not have limited liability, may or may not have managers, and can choose to be taxed as corporations or partnerships or be exempted from tax like sole proprietorships.
• Corporation - Corporation are entities with limited legal liability and have a corporate wale separating them from their owners. A corporation may be run by one person or many (called directors director). Taxation of corporations is much more complex than any other business entity.