The 3 types of business

Sole proprietorship, partnership, corporation

Sole proprietorship

A sole proprietorship is a business with a single owner and not registered as a corporation, partnership or limited liability company. A sole proprietor can work as an independent contractor or operate a small business.
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A corporation is a business organization that is considered a separate entity from its owners, who are called shareholders.
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A partnership is organized to provide for proportional ownership of a company among the partners based on some type of formula or value of investment in the company.
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Limited liability

The United States-specific form of a private limited company. It is a business structure that combines the pass-through taxation of a partnership or sole proprietorship with the limited liability of a corporation.

Unlimited liability

Legal obligations general partners and sole proprietors because they are liable for all business debts if the business can't pay its liabilities.


The capital raised by a business or corporation through the issue and subscription of shares.


A sum of money paid regularly by a company to its shareholders out of its profits.

Board of directors

a body of elected or appointed members who jointly oversee the activities of a company or organization.

Which type of business is most common?

A sole proprietor is the most common form of business organization. It's easy to form and offers complete control to the owner. But the business owner is also personally liable for all financial obligations and debts of the business.