A significant number of potential future entrepreneurs are often in doubt as to which form of business in the Republic of Croatia to choose. Most often, the choice is are between a limited liability company and a trade. In this regard, this final undergraduate thesis seeks to point out the important characteristics of the most common legal forms of business in the Republic of Croatia: limited liability companies (LLC), simple limited liability companies (SLLC) as a version of LLC and trade. By comparing them and highlighting their advantages and disadvantages, it can be easier for future entrepreneurs to choose the form of business they will choose. There is no best legal form of business that can be universally recommended to every entrepreneur, but each entrepreneur must choose it himself, in a way that harmonizes the advantages and disadvantages of certain legal forms with their own wishes and needs. The decision on the selection of a business entity should be based on knowledge of regulations, comprehensive analysis, careful consideration and detailed planning and calculation of long-term profitability of the business. The choice of trade is appropriate if the future entrepreneur expects a smaller volume of business with one predominant activity, due to the lowest costs of establishment and relatively low fiscal burden, especially with a flat-rate payment of income tax. However, the future entrepreneur must be aware that in this form of business, the tradesman is indefinitely liable with all his assets for the obligations of the trade, which is probably the biggest disadvantage of the trade. Deciding to carry out future entrepreneurial activities through a company is appropriate if the business is expected to be larger, because the profit tax paid by a limited liability company is lower than the income tax paid by a tradesman. It should be noted that the members of a limited liability company are not the ones that are liable, but only the company with all its assets. The negative aspects of this form of business are: the obligation to pay the initial capital, which significantly increases the cost of establishing a LLC, determining the profit according to the principle of occurrence of a business event, which in case of problems with collection of receivables may jeopardize business liquidity and liabilities SLLC to contribute at least a quarter of the realized profit to legal reserves.