Sole proprietorship is the simplest form of business type. It is a business owned and controlled exclusively by one person. This person is responsible for the business, including all liability and any profit or loss. Profits and losses of the business are of the owner's personal income and the proprietorship firm is disregarded for tax purposes. However, since legally the firm is nothing more than an individual using a trade name, there is no limit to the owner's liability for the firm's obligations.

Features: Inexpensive to form, Easy to dissolve, Generally have no tax aspects, Virtually no formalities to be observed except basic bookkeeping, Firm's liabilities are treated as personal liabilities of the owner and On death of the owner sole proprietorship immediately ceases to exist.

It is an association of two or more persons (persons being people, corporations, other partnerships, LLC's, trusts or others) to carry on, as co-owners, a business for profit. These individuals are responsible for the business, including all liability and any profit or loss. The persons intending to enter into a partnership make an agreement to share profits and losses. The partnership is required to file an informational return to the government to report what the profits and losses of the partnership were and how these were allocated to the partners. Since the liability of partners is joint and several, any particular partner can be made to pay the entire debts of the partnership, regardless of the allocation of profits and losses, or capital contributions made into the partnership. Partnership can be as simple or complex in structure and administration as the partners want it to be. A partnership ceases to exist when certain criteria are met, such as the death or bankruptcy of a partner; or if the partners decide to end the partnership.

Features: Relatively inexpensive to form, Each partner has joint and several liability to the partnership and Taxation is a bit complex, but the partnership itself pays no taxes.

LLC's are extremely flexible, and can be used for a very wide range of businesses. Like partnerships, LLC's can be as simple or complex as the members desire. Depending on state law, an LLC can have the same limited liability for members as a corporation, or have some members with limited liability and some without limited liability (like a limited partnership), or even have no limited liability for any members (like a general partnership).

A LLC functions as a limited liability corporation, but is taxed and operated in a way that is most consistent with a Partnership. However, one must ensure that a Limited Liability business does not have more than two of the four qualities that characterize a corporation (limited liability concerning assets; continuity of life; centralization of management; the ability to transfer ownership interests). If more than two of these qualities are met, the Limited Liability becomes a Corporation and is taxed accordingly.

LLC's are extremely flexible, and can be used for a very wide range of businesses. The members (equivalent to shareholders or partners) can, but need not, have limited liability; can, but need not have, managers (equivalent to directors and officers) and can elect to be taxed either as corporations, or as partners (if they have two or more members) or be disregarded for tax purposes like a sole proprietorship.

Features: A hybrid of a corporation (with an ability to limit personal liability) and a partnership (with an ability to assess profits and losses to individuals), this type of organization provides a flexible structure to achieve these ends.

A business corporation is a legal entity established by individual(s) under the laws of a state to conduct particular types of business or transactions. Taxation of corporations is much more complex than sole proprietorships or partnerships. Depending on the number of, residency of and type of shareholders, a corporation can elect to be treated for tax purposes as if it were a partnership (an S corporation), and therefore not pay taxes itself, or it can be treated as a taxable entity (a C corporation). An S Corp allows its shareholders to treat profits as distributions and to pass them through to their personal tax return.

Features: The corporation exists separately from its shareholders, directors and employees, The corporation may make contracts, assume liabilities, sue and be sued, Liability of shareholders is limited to the amount of shares held by them and Shareholders can transfer ownership interests.

Advantages: Relatively cheaper to register, Simple Compliance, Limited Liability, Scaleup by increasing paid-up capital and issuing shares to investors and Can be 100% foreign owned.

There is no Delaware income tax for Delaware corporations or limited liability companies that do not do business in Delaware.

The 85% of the revenue of Delaware State is generated through Company Incorporations only. For over a century, Delaware has been the home for America’s premier corporations.

More than half of the Fortune 500 are incorporated in Delaware.

You can form a Delaware corporation, limited liability company, or business entity without coming to Delaware.

The owners and operators of a Delaware corporation or limited liability company are not required to be identified in the public records of the State.