Law Office of Hoang Huy Tu

A business is an activity performed for profit.

The difference between carrying on a business and a hobby is that a business has an expectation of profit, is run in a systematic, continuous and regular businesslike manner,

and has ordinary commercial principles governing it (such as business and accounting records). A person who collects and sells baseball cards on a regular basis from a store is engaged in a business, while a casual collector, who will occasionally trade a card or two with friends is probably engaged in a hobby. The distinction is important for tax purposes as losses from a business are tax-deductible, while losses generated from a hobby are not.

The most common forms of business organizations include:

(1) Sole proprietorship

(2) Partnership

(3) General partnership

(4) Limited partnership

(5) Limited liability partnership

(6) Corporation

(7) Subchapter S corporation

(8) Subchapter C corporation

(9) Limited liability company

The form in which you conduct your business determines issues such as the extent of personal liability that you have from the business and how the business will be taxed