There are usually 4 types of legal ownership for businesses: A business owned and operated by one person. Freedom: don"t need to answer to anyone but themselves. simple legal setup: registration is not required. Tax benefits: losses in early stages can be deducted from income (one legal entity). Lack of continuity: legally dissolves when owner dies. unlimited liability: personal liability for all debts of the business. depends of resources of one person (managerial and financial limitations) 2 or more persons agree to combine money, managerial and technical abilities to operate a business for profit. able to invite new partners to join business (ability to grow by adding talent and money) Taxed as individuals (not regarded as legal entities) difficulty in transferring ownership: may not sell out without other partners". Lack of continuity (even if only one partner pulls out/dies) consent.