Video: Entities Formed Without Filing

In this lesson, Nick Palazzolo, CPA, breaks down the process of starting up business entities, particularly focusing on the types that don't require formal paperwork to be established. He clarifies the notion that sole proprietorships and partnerships are unique in that they can be initiated without registering with the state. Nick details how sole proprietorships are the simplest form, operated by an individual without legal distinction from the owner, while partnerships can form organically through the actions of two or more individuals. The lesson also briefly outlines the need for formal documentation when establishing other types of entities, such as corporations and limited liability companies, and what those documents generally entail. Additionally, he discusses the practical implications and legal considerations of running a business without an official entity formation, from liability issues to the ease of setup.