Business Organizations

Discover what happens in a business organization

The terms below are words that you will have to be familiar with in order to understand the three types of businesses

Limited Liability

Limited Liability is a situation in which a shareholder is not responsible for a corporation's debt.

Unlimited Liability

Situation in which a business owner is responsible for all of the business' debts.

Stock

Shares of ownership in a corporation.

Dividend

A shareholders' share of a corporation's profits.

Board Of Directors

People who are elected by shareholders to run a corporation.

The Three Types of Businesses

Sole Proprietorships

One person owning and operating a business.

This is the most common type of business.

A real life example of sole proprietorship is Kim Kimble, who owns and operates her own business.

Kim Kimble has unlimited liability. She is totally responsible for her business' debts.

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Partnerships

Legal businesses with two or more partners.

A real life example of a partnership is the founders of "GOOGLE" ,Larry Page and Sergey Brin.

Corporations

  • Legal entity with authority to have liability separate from owners.
  • Anyone could be apart of a corporation just by simply purchasing a stock or dividend. When you are apart of a corporation you have limited liability; which means if a corporation goes into debt you will not be responsible.
  • An example of a Corporation is the Bank of America.
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Below is a picture of Bank Of America's stock sales between 2010 and 2011.

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This flier was created by: Mikayla Simmons and A'shantia Mitchell