SOLE PROPRIETORSHIP:
A person who does business for himself or herself is engaged in the operation of a Sole Proprietorship. Anyone who does business without creating an organization is a sole proprietor. The sole proprietorship is the most elementary organizational form: the owner is the business. No legal formalities are necessary to create this form of business. A sole proprietor is personally liable for all obligations of the business. The sole proprietorship is usually associated with small, local enterprise, but there is not legal or geographical limits to the the scope or complexity of its operations.

PARTNERSHIP
A partnership is an association of two or more persons who carry on a business. The partner are co-owners of the business, and thus they have joint control over its operation and right to share in its profit. Each partner is personally liable for partnership's obligations. The Union Partnership Act (UPA), adopted in most states sets out the rules to govern the operation of partnership in the absence of formal partnership agreement. The partnership is suitable for almost any type of business.

LIMITED PARTNERSHIP
A limited partnership consists of at least one general partner and at least one limited partner. The general partner is the same as partner. The limited partner is an investor. Limited partner contributes capital, but does not have power of management. Limited partnership allows a person to invest in a partnership and share its profit without becoming personally liable to partnership creditors.

CORPORATION
The corporation is the most widely used form of business. It consists of shareholders (the owners of the business) and the board of directors (the people elected by shareholders to manage the business). The directors employ the officers and employees to perform daily business operations. An outstanding characteristic of the corporation is that its shareholders are not personally liable for business obligations beyond the amount of their respective investment. The word INCORPORATION refers to the procedural mechanics of forming a corporation, which may very from state to state. The first step in forming an incorporation is an article of incorporation prepared by lawyer and signed by incorporators. The article of incorporation must be filed with the secretary of state.

BUSINESS TRUST
Business trust or " Massachusetts trust" is organization created by agreement. One or more "trustees" have  legal rights of ownership and management of business property. The profit is distributed to "beneficiaries". This form of business organization is created in attempt to obtain advantage of corporate status, such as limited liability without incorporation.