Corporations may raise funds through the sale of stock and have a completely independent life separate from its shareholders. If a shareholder leaves the company or sells their shares, the corporation can continue doing business relatively undisturbed. Corporations operate with a board of directors and officers elected by the board. The management and regulation of affairs are prescribed in its bylaws.

A sole proprietorship is an unincorporated business owned and operated by one person. A sole proprietor carries all financial responsibility for the business, including its gains, debts, and losses. The life span is limited to that of the owner or its restructuring, sale, closing, or transfer of the business. Some examples of a sole proprietorship include cleaning services, freelance writer, landscaping or snow removal services, or tutoring services.

A general partnership is created when two (2) or more persons or entities agree to form a business venture through a statement of partnership. Partnerships may be formed by a contractual understanding between the parties and may be written in the form of “partnership agreements” or may be oral agreements. The partnership agreement is one and the same as the partners, meaning it is not a true entity separate from its owners.

A limited partnership consists of at least one general partner and at least one limited partner. A general partner(s) is responsible for running the business’s day-to-day operations and is fully liable for the obligations and debts of the limited partnership. A limited partner(s) has minimal involvement in the business operation and is not liable for the obligations and debts of the limited partnership unless the limited partner(s) is also the general partner(s). The partnership agreement governs the rights and duties of the limited partnership.

A registered limited liability partnership (RLLP) is composed of general partners who normally would be fully liable for the business. Unlike a general partnership, an RLLP provides each of its individual partners protection against personal liability that may occur in situations where the general partner would otherwise be held responsible. The partnership agreement governs the rights and duties of the RLLP.

Wyoming is the first state to pass legislation to recognize a Decentralized Autonomous Organization, often called a DAO. A DAO is a form of an LLC that uses a blockchain and has the ability to conduct management activities algorithmically using smart contracts. A DAO’s articles of organization and smart contracts govern the activities of the DAO and its rights and duties while an operating agreement may be used to supplement to the extent the articles or smart contract do not otherwise provide for a matter. While a DAO can, to some extent, conduct its management activities algorithmically, it also has members.