Business Ownership Types
Basic Business formats
- 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.
- 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.
- 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.
- Cooperative: 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.