What does the legal structure of a business refer to?

The legal structure of a business refers specifically to the type of ownership or the framework within which the business operates. This determination affects various aspects such as liability, taxation, and regulatory obligations. Different types of legal structures include sole proprietorships, partnerships, corporations, and limited liability companies (LLCs). Each structure offers varying degrees of personal liability protection for the owners and has different implications for how profits are shared and taxed. Understanding the legal structure is crucial for compliance with laws and regulations, and for making informed strategic decisions about the operation and growth of the business.