Legal Forms of Doing Business in the USA

Friends, welcome!
This is Igor Svechin.

Some time ago, I told you why we advise novice investors to register such a legal entity as a limited liability company (LLC) (

Forming an LLC is a good recommendation, but such a legal form of doing business in the United States is by no means the only one.
There are others.

For example:

A sole proprietorship is the simplest type of business structure.
Suitable, as they say, for “small shopkeepers.” Self-employed and self-employed professionals: bakers, hairdressers, accountants, photographers and so on.

The biggest risk of just such a legal form is that an individual entrepreneur takes all the risks, and is responsible for them with ALL his property. Including PERSONAL. And, by the way, not all banks are happy to issue loans to individual entrepreneurs for business development.

A partnership is an association of two or more equal professionals: financiers, lawyers, auditors, programmers. A partnership can be of two types: general – when all its participants are financially responsible with all property and assets, and limited liability – when participants risk only their own contribution to the company, that is, fines do not apply to personal property.

A corporation is a company with a branched structure and many owners: there may even be more than 100 shareholders. The corporation is suitable for any business. It is also easier to attract investments in a corporation than in any other form of business organization. With this form of ownership, it is easier to control all costs. Shareholders are responsible only for their contribution to the company, and the business is usually managed by the board of directors, which reports to the shareholders.

☝️ However, I will repeat once again. For Penninvest shareholders and those who are just considering investing in US real estate, an LLC is the ideal business form. Repeatedly tested by experience and time.