Businesses can be classified into the following forms: proprietorship, partnership, corporation, limited liability company (LLC), and limited liability partnership (LLP). Different forms of businesses have different characteristics. Which of the following characteristics belong to a corporation? Check all that apply. Owners with limited liability and little input into daily management of the firm Chartered by a state and is its own legal entity, distinct from its owners Has unlimited life Easier to transfer ownership in the form of stock You see and read about different kinds of businesses every day. The following scenarios describe two businesses. Use the description of each business to classify it as a proprietorship, partnership, corporation, or limited liability partnership and/or limited liability company (LLP/LLC). Business #1: Lafayette and his friend, Shirley, run a carpet cleaning business. They distribute the profits proportionately and report their portion of the business’s profits on their individual tax returns. This is an example of: A partnership. An LLP/LLC. A proprietorship. A corporation .

There are mainly five types of business organizations namely proprietorship, partnership, corporation, limited liability partnership, and limited liability company

The first type is the proprietorship business organization. In this, only one person is responsible for all the activities and have minimum legal formalities. Example – the owner of a company or organization.

The second type of business organization partnership which includes two or more persons, who work as a partner in an organization. The motive behind establishing the partnership to divide the profit and losses in their respective ratios.

The third one is a corporation. It shows a different legal entity with respect to its owners and also it includes more statutory compliance.

Based on limited liability characteristics, the business organization is further classified into Limited Liability Partnership and Limited Liability Company.

According to the IRS, the separate return to be filed by each of the partners in LLP/LLC under form no 1065 in Schedule K.