Glossary · People and paperwork
Business legal entity structure
In short
This refers to how a business is legally organized, such as a sole proprietorship, partnership, LLC, or corporation. Your chosen structure impacts liability, taxes, and how you acquire and operate the business.
What it means in a deal
When acquiring a business, you'll decide whether to continue the seller's entity structure or form a new one. This choice affects your personal liability, tax obligations, and how the assets are transferred. Discuss this with your attorney and tax advisor early in the process.
Related terms
Common questions about Business legal entity structure
- What if the acquired business changes its legal entity structure after the SBA loan is approved?
- What happens if the acquired business changes its legal entity structure after the SBA loan is approved?
- Can a lender approve a change in a borrower's business legal entity structure without prior SBA approval?
- What happens if a major change in the acquired business's legal entity structure occurs after SBA loan approval?
- Are there specific requirements for the legal entity structure of the acquiring business for an SBA 7(a) loan?
- Can a 7(a) lender approve a change in a borrower's business legal entity structure without prior SBA approval?
Defined by CapBench SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
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