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Considerations in Selecting a Business Entity - Explained

What are the Characteristics of a Business Entity?

Written by Jason Gordon

Updated at April 5th, 2023

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What are the main characteristics of a particular business entity?

There are numerous characteristics that make a business entity unique. The major characteristics of a business entity are as follows:

Creation & Maintenance - The effort associated with forming and maintaining the entity;

Continuity - The continuity or stability of the organization upon given occurrences;

Ownership & Control - The ownership rights and control of those involved with the business;

Personal Liability - The potential for the personal liability of those involved with the business;

Compensation - The compensation and division of profits among business owners; and

Taxation - The taxation of the organization's earnings and its distributions of profits to the owners.

Next Article: Creating a Business Entity Back to: BUSINESS ENTITIES

This list is certainly not exhaustive; however, these primary characteristics provide a great deal of necessary insight for understanding and choosing a business entity.

Discussion Question

Why do you think these are the primary characteristics of a business entity? Can you think of any other characteristics of the business entity that would be important to understand when selecting and forming a business entity?

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