Glossary · People and paperwork
Legal structure
In short
This is how a business is legally organized (e.g., LLC, Corporation, Sole Proprietor). It affects liability, taxes, and how you structure the acquisition.
What it means in a deal
The legal structure of the business you're buying (Sole Proprietor, Partnership, LLC, S-Corp, C-Corp) significantly impacts the acquisition process. It dictates whether you'll do a stock purchase or an asset purchase, and how liabilities and taxes are handled. Understand the implications for your own legal entity and tax situation before closing.
Related terms
Common questions about Legal structure
- Does my business legal structure (like LLC or Sole Proprietorship) affect SBA 7(a) loan eligibility?
- 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?
- When can a lender approve a change in the business name or legal structure without prior SBA approval?
- Can a lender approve a change in a borrower's business legal entity structure without prior SBA approval?
- Can a lender approve a change in a 7(a) borrower's 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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