Legal structures refer to the frameworks that define how a business or organization is organized and operates. Common types include sole proprietorships, partnerships, limited liability companies (LLCs), and corporations. Each structure has its own legal implications, tax responsibilities, and levels of liability protection for owners. Choosing the right legal structure is crucial for business owners, as it affects everything from personal liability to tax 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.