4 Types of Business Ownership

By: Trent Overton

Research

Sole Proprietorship

  • A sole proprietorship, also known as the sole trader or simply a proprietorship, is a type of business entity that is owned and run by one natural person and in which there is no legal distinction between the owner and the business.

  • less paperwork

  • a tutor is an example of a sole proprietorship

Partnership

  • A legal form of business operation between two or more individuals who share management and profits. The federal government recognizes several types of partnerships. The two most common are general and limited partnerships.
  • a business or firm owned and run by two or more partners

  • less paperwork

  • Warner Brothers, Ben and Jerry's are 2 examples of a Partnership

Limited Liability Partnership

  • A business organization that allows limited partners to enjoy limited personal liability while general partners have unlimited personal liability.

  • is a partnership in which some or all partners (depending on the jurisdiction) have limited liabilities

  • one partner is not responsible or liable for another partner's misconduct or negligence

  • individual partners are not obligated to consult with other participants in certain business agreements

Corporation

  • A form of business operation that declares the business as a separate, legal entity guided by a group of officers known as the board of directors .

  • a company or group of people authorized to act as a single entity (legally a person) and recognized as such in law

  • legal entity guided by a group of officers known as the board of directors

  • corporation's shareholders are not liable for any debts incurred or judgments handed down against the corporation

  • Best Buy or 7-Eleven are both examples of corporations

Forms of Business Ownership