Legal business structures refer to the various ways in which a business can be formed and organized. These structures are used to define the relationship between owners, employees, creditors and other stakeholders. They also determine how taxes, liabilities and other legal factors will apply.

The most common legal business structures are corporations, limited liability companies (LLCs), partnerships, sole proprietorships and non-profits. Each structure has its own advantages and disadvantages, such as providing different levels of protection from personal liability, taxation lingo, operational rules and more – all of which should be carefully considered before making a decision. By selecting the right legal business structure, entrepreneurs can ensure their businesses operate effectively while minimizing exposure to risk.