Checkpoint: Business Organization
A sole proprietorship is a business that is owned by one person only. That one person is the sole owner and makes all decisions on their own. Most sole proprietorships are small business likes restaurants, markets, and liquor stores. The owner must have knowledgeable business experience or else his business will not be profitable. Most of this shops end up closing up after a couple of years because the sole owner must take in all the losses.
A partnership is a business where there are two or more persons. Partnerships are usually business that don’t last long either like sole proprietorships. When two people need to make business decisions regarding their business many conflicts can arise. This is the number one reason why partnerships end up getting dissolved and business either get closed down or sold to someone else.
A limited liability company is a business that is structured by the state statue. Most business people find this the easiest way to conduct a business. LLCs are popular because, similar to a corporation, owners have limited personal liability for the debts and actions of the LLC. Other features of LLCs are more like a partnership, providing management flexibility and the benefit of pass-through taxation.
A joint-stock company is a business type of corporation or partnership involving two or more individuals that own shares. These companies are normally the big corporations like Macy’s, Target, and Wal-Mart. These companies are much harder to dissolve due to the many share holders involved.