4 Major Types of Business Ownership

By: Trevor Johnson

The major types of business ownership

There are 4 main types of business ownership. These include the following:
  1. Sole Proprietorship
  2. Partnership
  3. Limited Liability Partnership (LLP)
  4. Cooperation

Sole Proprietorship

A sole proprietorship is a type of business entity that is owned and run by one individual or one legal person, and in which there is no legal distinction between the owner and the business. The major advantage of being a sole proprietor is that you ultimately get to make all of the decisions. A disadvantage is that you are completely liable for all of the debt of the company.

General Partnership

A general partnership is simply a business where there are 2 or more people equally in charge of the business. These people are equally responsible for the business' growth and decline. As well as if the company is being sued.
Sole Proprietorship vs. General Partnership

Limited Liability Partnership (LLP)

In a limited liability partnership, the partners enjoy some protection against personal liability.The LLP is not a separate entity for income tax purposes; profits and losses are passed through to the partners and reported on each individual’s tax return.
What is a Limited Liability Company or LLC?

Corperation

A corporation is a for 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 corporate structure is perhaps the most advantageous way to start a business because the corporation exists as a separate entity. In general, a corporation has all the legal rights of an individual, except for the right to vote and certain other limitations.