There are several types of business entities, each with its own legal structure and implications. The most common types include sole proprietorships, partnerships, limited liability companies (LLCs), and corporations. A sole proprietorship is owned by one person, while a partnership involves two or more individuals sharing ownership. LLCs combine features of both partnerships and corporations, offering liability protection to owners. Corporations are separate legal entities that can own property, enter contracts, and be taxed independently of their owners. Each type of business entity has different tax obligations, liability protections, and regulatory requirements, making it essential for entrepreneurs to choose the right structure for their needs.