When starting a business there are four categories that your business can fall under. They are corporation, limited-liability-company, partnership, and sole proprietorship. Each one of them has different advantages and disadvantages but I believe that a limited-liability-company is the best way to start a business. .
Now one thing must be said and that is that all of this information is based on the fact that you plan on running a big-money business. If you plan on just selling pizza and baseball cards or something along those lines then there may be better solutions. This information is for anyone who wants to be able to own a million dollar business with customers worldwide.
The oldest type of business out of the four is sole proprietorship. This is the easiest form of business to run and can be started by anyone. However, these types of businesses also have the highest failure rate. A business classifies as a sole proprietorship if it has only one owner and is not registered with the state as a corporation. The big advantage to this is that it is easy to set up and it does not take a lot of money to get a business going. Another advantage is that the income of your business is not separate from your personal income therefore you are only taxed once. The money you pull in from your business is the same as the money you pull in elsewhere according to the IRS so that is a big break. The disadvantages to this are that you have a lot of competition, advertising is a lot harder, and you have full responsibility for anything that happens to the business (Nolo Proprietorship). .
A partnership is kind of like a sole proprietorship except it has two owners instead of one. Again, this business is fairly easy to run but it also has the second highest rate of failure. In all fairness to proprietorships and partnerships, the reason why they have such high failure rates is because so many of them are started everyday and even unqualified people can start one.