Types of Business Organizations

Lekura Jones

Sole Proprietorship

A sole proprietorship has a single owner, who takes all the risk and receives all the profits. A sole proprietor can work as an independent contractor or operate a small business. A bookkeeping business caters to the financial needs of other businesses. A bookkeeper posts a company’s revenue, expenses and other financial data to an accounting system. This gives businesses owners accurate financial information concerning their business.

Partnership

A partnership divides the risks and profits of a business among two or more people. Professionals such as doctors and lawyers often form partnerships.There are two types of partnership structures, general partnership and limited liability partnership. With a general partnership, the business owners are personally liable for business lawsuits and business debt. For a limited liability partnership, the business owners are not personally liable for business lawsuits and business debt. Partnerships are easy and inexpensive to form.

Corporations

A corporation issues shares of stock to investors. Structuring a business as a corporation has a number of important legal requirements and consequences that impact investors.