Business formation is the process of legally establishing a new company. This involves choosing a business structure, such as a sole proprietorship, partnership, limited liability company (LLC), or corporation. Each structure has different legal and tax implications, so it's important for entrepreneurs to select the one that best fits their goals and needs. Once the structure is chosen, the next steps typically include registering the business name, obtaining necessary licenses and permits, and filing the required paperwork with the appropriate government authorities. Proper business formation helps protect personal assets and ensures compliance with local, state, and federal regulations.