Business formation is the formation of brand new activity which involves making money by manufacturing products or selling and buying the products with the people. It is the first and foremost step in starting a business for everyone. The type of business formation decides the future run and growth of the business, as sole proprietor makes the decision by own, where in partnership, every decision should be consulted with all the partners involved in the business. The main legal structures of the business formation are the Sole proprietorship, partnership, Limited liability Company (LLC), Corporation and Nonprofit. The business formation process in entities such as LLC and corporations were involved in getting help from the trained lawyers. Each type of structure has its own advantages and benefits that depend on the size and nature of the business, the number of owners and employees, and other variables. The requirements for the business formation vary from state to state and it is not the same thing for all the states. The franchise is another one kind of business formation in which the logo, name, industry, trading and other aspects of an existing business are licensed and a new business is formed. They pay to the larger company for the right to use their brand name.