The main legal forms a business can choose from include

The Sole Proprietor / Trader: This is where the business is owned and run by one person or a family. The most important characteristic of this type of business is that there is no difference between the assets of the business and the assets of the owners. Thus, should a business fail and have outstanding debts which it cannot pay, then the courts can order the sale of the owners private assets such as the home or car of the owner to pay back the debts. This is known as unlimited liability. Sole traders are generally small business and their financial statements are not governed by law and thus they have no need to publish their accounts except to the Revenue Commissioners.

Partnerships: A partnership exists where two or more people own, run and share the profits and losses of the business. The main advantage a partnership has over a sole proprietorship is that, as there are a number of partners involved, the risk is shared and it may be easier to raise finance as more collateral is likely to be available to raise capital/loans. Partnerships also have unlimited liability and are not required to publish their accounts except to the Revenue Commissioners.

Companies: A limited company is a legal structure whereby the owners of the business are only legally liable to the value of whatever they have invested in the business. Thus the private assets of the owners are (to some extent) not at risk if the business experiences financial difficulties.  The creation of a limited company involves setting up a legal persona. This is normally carried out with the assistance of a solicitor who drafts the necessary documents for registration with the Registrar of Companies.  Thus, a company is a legal entity created by law that is capable of entering into contracts, incurring liabilities and carrying out business. For the owners, liability is legally limited to whatever they invest in the company. Companies must publish information about their operations, financial transactions and results. This is required under the various Companies Acts that have been enacted since 1963.