Business structures refer to the legal frameworks that define how a business operates and is organized. Common types include sole proprietorships, partnerships, limited liability companies (LLCs), and corporations. Each structure has its own implications for liability, taxation, and management, affecting how profits are distributed and how decisions are made. Choosing the right business structure is crucial for entrepreneurs, as it influences legal responsibilities and financial obligations. For instance, a sole proprietorship offers simplicity and full control but exposes the owner to personal liability, while a corporation provides limited liability protection but involves more regulatory requirements and formalities.