Within business, one of the initial concepts to discern is the type of legal entity to establish.  This factor is extremely important with regards to legal liability, taxes, profit-sharing and operation. 

Every business in the U.S. falls into one of three categories, as defined in the federal tax code: 

  • Sole proprietorship
  • Partnership 
  • Corporation 

The basic accounting rules for all three types are generally the same, although a business's structure determines how profits will be taxed, and smaller companies can choose between the cash and accrual methods of accounting.

This course focuses on understanding the various types of legal entities and examines their structure to determine which type is best for various businesses.  We examine steps for the small business owner and bookkeeper to set up their entity, business and overall administrative processes.  Lastly, we delve into the important concepts surrounding developing your financial chart of accounts and evaluating important considerations prior to beginning the process.

Whether you are a business owner or want to develop the skill of bookkeeping to begin a career, there are critical accounting and bookkeeping concepts that are important to learn. These courses have been developed by a CPA who has both small and large business accounting experience and background.  The full curriculum of courses will provide you with the ultimate foundation to a career as a bookkeeper.  

NOTE: This course is one of a series of courses developed for the Professional Bookkeeping Certification program on Illumeo. The full curriculum of courses will provide you with the ultimate foundation to a career as a bookkeeper. 

Note: Information within this course comes from readily available public domain documents and is utilized by the trainer as a supplement for relaying the course content.

Learning Objectives
  • Explore the definition of accounting and legal business entities and their purpose.
  • Explore the types of legal business entities.
  • Explore methods to set up your business.
  • Explore methods to set up your organization structure.
  • Identify key criteria for a chart of accounts.
  • Identify key steps for developing your chart of accounts.
Last updated/reviewed: August 13, 2023

Included In Certifications

This course is included in the following Certification Programs:

14 CoursesProfessional Bookkeeping Certification

  1. Bookkeeping: Terminology and Process Execution
  2. Bookkeeping: Debits And Credits
  3. Bookkeeping: Cash vs. Accrual
  4. Bookkeeping: Payroll And Expenses
  5. Bookkeeping: Legal Entity And Chart Of Accounts
  6. Bookkeeping: Journals, Subsidiary Ledgers and General Ledger
  7. Bookkeeping: Responsibilities
  8. Bookkeeping: Fixed assets and inventory
  9. Bookkeeping: Accounts Payable/Accounts Receivable And Receipts
  10. Management Internal Control Essentials
  11. GAAP Principles, Assumptions and Considerations
  12. GAAP Presentation of Financial Statements
  13. Bookkeeping Basics – Case Study Scenario
  14. Useful Bookkeeping Tools
30 Reviews (105 ratings)

Reviews

4
Member's Profile
Very in-depth and thorough look into the topics presented. I felt fortunate to have previous education as some of the concepts may have been too much for someone just starting from the beginning.

5
Anonymous Author
I learned a lot from this course about the forms of business entities and their pros and cons. In addition, I also learned the chart of accounts in this course and how to build one to start the bookkeeping job. There are many information related to the legal and tax issues, and the formation and structures of various legal entities.

3
Anonymous Author
I got a lot out of the legal entity review. It was a good refresher. I like the examples used and the pros/cons provided for the various types. I felt that the information on COA was very rushed. It was such a high-level review I didn't get a lot out of it. Obviously, real world examples don't work in this case.

4
Anonymous Author
This is a very valuable segment. Although I am very familiar with COA(s) the importance and the ability to build from the ground up is essential for quick reporting to know where you are and where you are spending your money. This segment also lets you know why which is very important

5
Anonymous Author
a very informative course. breaks down everything by groups and explains everything in detail. I learned a lot from this course and have enough knowledge to know what would be the questions to ask a professional.

5
Anonymous Author
This a great course that highlights a number of key topics for a number of entities. I believe it gives a great foundation on bookkeeping and the thought process involved to setup companies' books.

4
Anonymous Author
This would be very helpful for someone starting a business or helping a business get off the ground. It would also be extremely helpful to anyone setting up a chart of accounts for the first time.

5
Member's Profile
the information was fantastic ... however some pic of act of incorporation or partnership agreements and COA, etc ..during the lecture to see what it looks like would have been great...

5
Member's Profile
I learned about the Tutorial on various business set ups and how they impact with owners and preparers of financial statements. Chart of account steps were clear and elaborate

4
Anonymous Author
This was a very interesting course, I can use this information if I were to setup my own business. Everything was explained clearly and the example were great.

5
Anonymous Author
This is a good review and summary of the different entities. I especially appreciated the COA information and the things to consider during the initial setup.

5
Member's Profile
Great course with a lot of information! She goes into detail with each entity, describing all aspects and she also gives good real-world examples.

5
Member's Profile
I was always interested in learning more about the different types of entities. This was a great course and lots of information.

5
Anonymous Author
This was a lot of good information, I wanted more examples in the course about setting up a COA and what it would look like.

5
Anonymous Author
Detailed enough to provide a good overview. Some charts or tables would be great for the slides so they are not too wordy.

5
Anonymous Author
Good overview of different types of corporations. I would have separated chart of accounts into different lesson.

5
Anonymous Author
A nice basic foundational course. Easy to follow and understand. A good general overview of the Entities and COA.

4
Anonymous Author
I thought that it was very informative and helped me learn very important details that can be applied to my job.

5
Member's Profile
Easy to understand explanations of all entities. Good info on charts of accounts and how to plan execution.

4
Anonymous Author
Good foundation for the different types of entities available and how to set up a chart of accounts.

5
Member's Profile
This was a nice concise review of the key terminology. Slides organzied and presented well.

5
Anonymous Author
Like the examples, wish there were more. very helpful material. subject matter a little dull

4
Member's Profile
The information is clear and understandable. The detail is great for reference information.

5
Member's Profile
This segment was difficult, so much information to keep straight between the catagories.

5
Member's Profile
Very informative and information was presented in a way that is very easy to understand

5
Anonymous Author
Thorough information with numerous examples to illustrate covered topics.

5
Member's Profile
This course gave me a clear understanding between the different entities.

4
Anonymous Author
It wasn't as comprehensible as the other courses but still good.

4
Member's Profile
good material . Too long and winded it could be shortened

5
Member's Profile
The section on chart of accounts was helpful for me.

Prerequisites
Course Complexity: Foundational

No Advanced Preparation or Prerequisites are needed for this course. However, it is recommended to take the other courses in the series prior to completing this one.

Education Provider Information
Company: Illumeo, Inc., 75 East Santa Clara St., Suite 1215, San Jose, CA 95113
Contact: For more information regarding this course, including complaint and cancellation policies, please contact our offices at (408) 400- 3993 or send an e-mail to .
Course Questions and Answers(3 Questions)
User picture

I really appreciated this course. On the quiz for this course the "correct" answer to question #1 was listed as "Limited Liability Corporation." However, since LLC's are not "incorporated" shouldn't the answer really read "Limited Liability Company"? I point this out because it could be confusing for people who are trying to learn the facts and differences about entities, and I like this course so much I just want to help make it better.

Member's Profile

very good catch. That was the wording error. We will correct it thanks so much for bringing it to the attention

Member's Profile

Thank you so much for highlighting this. Therefore, the correction has been done accordingly.

Instructor for this course
Course Syllabus
INTRODUCTION AND OVERVIEW
  Introduction to Bookkeeping Basics – Formation of a Legal Entity and Establishing a Chart of Accounts2:37
  Accounting Entity and Legal Entity Defined9:34
  Types of Entities: Part 111:36
  Types of Entities: Part 211:21
  Types of Entities: Part 38:42
  Establishing Your Operating Structure7:47
  Chart of Accounts (COA)10:27
  Key Steps to Develop the COA6:43
  Summary1:46
CONTINUOUS PLAY
  Bookkeeping Basics – Formation of a Legal Entity and Establishing a Chart of Accounts1:10:33
SUPPORTING MATERIALS
  Slides: Bookkeeping Basics – Formation of a Legal Entity and Establishing a Chart of AccountsPDF
  Bookkeeping Basics – Formation of a Legal Entity and Establishing a Chart of Accounts Glossary/IndexPDF
REVIEW AND TEST
  REVIEW QUESTIONSquiz
 FINAL EXAMexam