Types of Business Ownership
1. Sole Proprietorship
Single proprietorship is the simplest form of organization in most of the countries in the world. Unlike other forms of entity, it is usually not governed by special laws. A proprietorship is a type of business entity which legally has no separate existence from its owner. Hence, the limitations of liability enjoyed by a corporation and limited liability partnerships do not apply to sole proprietors. All debts of the business are debts of the owner. The single proprietor has unlimited liability since creditors of his business may proceed not only against the assets and properties of his business but also after his own personal assets and properties. A sole proprietorship essentially refers to a natural person or individual doing business in his or her own name and in which there is only one owner and no partners.
2. Partnership
A partnership is a form of business ownership in which partners share with each other the profits or losses of the business undertaking according to their agreements. The consideration of a partnership whether it is a separate and distinct legal entity separate from its owners varies in different countries. In the United States, section 201 of the Revised Uniform Partnership Act (RUPA) of 1994 provides that a partnership is an entity distinct from its partners. A general partnership refers to an association of persons or an unincorporated company created by agreement by two or more persons in which the owners are all personally liable for any legal actions and debts the company may face. A limited liability partnership is the same with general partnership, except that all the partners of the Limited Liability Partnership (LLP) are not personally liable like stockholders in a corporation.
3. Corporation
A corporation is a type of business entity which has a legal entity separate and distinct from its owners (stockholders or shareholders). The owners of the corporation enjoy a limited liability advantage in the
Single proprietorship is the simplest form of organization in most of the countries in the world. Unlike other forms of entity, it is usually not governed by special laws. A proprietorship is a type of business entity which legally has no separate existence from its owner. Hence, the limitations of liability enjoyed by a corporation and limited liability partnerships do not apply to sole proprietors. All debts of the business are debts of the owner. The single proprietor has unlimited liability since creditors of his business may proceed not only against the assets and properties of his business but also after his own personal assets and properties. A sole proprietorship essentially refers to a natural person or individual doing business in his or her own name and in which there is only one owner and no partners.
2. Partnership
A partnership is a form of business ownership in which partners share with each other the profits or losses of the business undertaking according to their agreements. The consideration of a partnership whether it is a separate and distinct legal entity separate from its owners varies in different countries. In the United States, section 201 of the Revised Uniform Partnership Act (RUPA) of 1994 provides that a partnership is an entity distinct from its partners. A general partnership refers to an association of persons or an unincorporated company created by agreement by two or more persons in which the owners are all personally liable for any legal actions and debts the company may face. A limited liability partnership is the same with general partnership, except that all the partners of the Limited Liability Partnership (LLP) are not personally liable like stockholders in a corporation.
3. Corporation
A corporation is a type of business entity which has a legal entity separate and distinct from its owners (stockholders or shareholders). The owners of the corporation enjoy a limited liability advantage in the