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Defining Three Types Of Business Organization

Sole Proprietorship - is the simplest business form under which one can operate or create a business.

Partnership - operation between two or more individuals who share managements.

Corporation - Where you don't have to do nothing but buy stock.

Real Life Examples

Sole Proprietorship - A landscaper may work alone or hire a small team of employees. Landscapers maintain lawns, plants and trees of homeowners and businesses.

Partnership - a real estate office employing 20 agents may be owned by a general partnership consisting of five of those agents.

Corporation - Buying stock from a business that is already owned and operated.

Words Define

Limited liability - is where a person's financial liability is limited to a fixed sum, most commonly the value of a person's investment in a company or partnership.

Unlimited liability - refers to the legal obligations general partners and sole proprietors because they are liable for all business debts if the business can't pay its liabilities.

Stock - A holder of stock (a shareholder) has a claim to a part of the corporation's assets and earnings.

Dividends - a sum of money paid regularly (typically quarterly) by a company to its shareholders out of its profits (or reserves).

Board of directors