Sectors and legal form of organization
In the national income and product accounts (NIPAs), gross domestic product and other major aggregates are presented in terms of three economic sectors: Business, household and institution, and general government. Businesses are classified into five categories, generally according to legal form of organization: Corporations, sole proprietorships, partnerships, other private business, and government enterprises. Corporate business consists of entities required to file federal corporate tax returns (IRS Form 1120 series) and the following entities: Mutual financial institutions and cooperatives subject to federal income tax, private noninsured pension funds, nonprofit organizations that primarily serve businesses, Federal Reserve banks, and federally sponsored credit agencies. Sole proprietorships are all entities that are required to file IRS Schedule C (Profit or Loss from Business) or Schedule F (Farm Income and Expenses). Partnerships are all entities required to file federal partnership income tax returns, IRS Form 1065 (U.S. Partnership Return of Income). Other private business consists of tax-exempt cooperatives and all entities that are required to report rental and royalty income on IRS Schedule E (Supplemental Income and Loss). Government enterprises are government agencies that cover a substantial portion of their operating costs by selling goods and services to the public and that maintain separate accounts.