Business structure refers to the way a company is organized and how it operates. It determines the legal framework, management hierarchy, and financial responsibilities of the business. Common types of business structures include sole proprietorships, partnerships, limited liability companies (LLCs), and corporations. Each structure has its own advantages and disadvantages, affecting taxes, liability, and decision-making processes. Choosing the right business structure is crucial for entrepreneurs. For instance, a sole proprietorship is simple to set up and offers complete control, but it also exposes the owner to personal liability. In contrast, a corporation provides limited liability protection but involves more regulations and paperwork. Understanding these differences helps business owners make informed decisions.