Basic Busi­ness formats

1. Sole pro­pri­etor­ship: a busi­ness owned by one per­son. The owner may oper­ate on his or her own or may employ oth­ers and has per­sonal lia­bil­ity of the debts incurred by the business.
2. Part­ner­ship: a busi­ness in which two or more peo­ple oper­ate for a com­mon goal – usu­ally to make profit. In most forms of part­ner­ships, each part­ner has per­sonal lia­bil­ity of the busi­ness debts. Three typ­i­cal part­ner­ships are gen­eral part­ner­ships, lim­ited part­ner­ships, and lim­ited lia­bil­ity partnerships.
3. Cor­po­ra­tion: a lim­ited lia­bil­ity entity that has a sep­a­rate legal per­son­al­ity from its mem­bers. A cor­po­ra­tion can be for-​profit or not-​for-​profit. A cor­po­ra­tion is owned by mul­ti­ple share­hold­ers and is over­seen by a board of direc­tors, which hires the business’s man­age­r­ial staff.
4. Coöper­a­tive: a lim­ited lia­bil­ity entity often referred to as a “co-​op”, that is for-​profit or not-​for-​profit. A co-​op dif­fers from a cor­po­ra­tion because it has mem­bers, as opposed to share­hold­ers, who share decision-​making authority.