A legal entity involves different individuals coming together to run a business. Various aspects affect the operations of a business depending on its type — from taxation, liability for debts, and obligations of the owners.
State laws govern the business formation, meaning the rights and obligations of business owners are set by the state that is its legal home.
To gain recognition, a business entity needs a separate identity from its owners, especially corporations, partnership businesses, or LLCs. All such companies should be legally registered in their home state. Here, the rights and responsibilities of business owners are governed by the laws of the state in which the company is incorporated.
