Types of Business Organizations

Defintions of Sole Proprietorship, Partnership, Corporation

Sole Proprietorship: Type of business that has a single owner, who takes all the risks and receives all the profits.

Partnerships: Type of business in which risks and profits of a business of a business are divideded among two or more people.

Corporation: Type of business in which investors own shares of stock and have limited liability.

Definitions Of Limited Liability, Unlimited Liability, Stock, Divided, and Board Of Directors

Limited Liability: Situation in which a shareholder is not responsible for a corporation's debts.

Unlimited Liability: Situation in which a business owner is responsible for all the business's debts.

Stock: Shares of ownership in a corporation.

Dividends: A shareholder's share of a corporation's profits.

Board Of Directors: People who are elected by shareholders to run a corporation.