Business Structure

Updated: 29 February 2024

What Does Business Structure Mean?

A business structure is a set-up for commerce that is recognized by the law of the land. This structure, along with the nature of the business, is often proposed before a legal body to gain a permit to operate.

Insuranceopedia Explains Business Structure

Some of the more common business structures are sole proprietorships, partnerships, and corporations. A business structure has distinct responsibilities. It might pay its taxes or distribute its earnings differently. For instance, in a corporation, it is the entity itself that pays the taxes and not the individual shareholders. In a sole proprietorship, on the other hand, the profits and tax burden go to the proprietor himself.

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