Explain the various forms of business ownership
There are various forms of businesses including sole proprietorship, partnership, corporation and cooperative. Sole proprietorship is the form of business which is owned by only one person. The owner of the business is the only liable person for all of the debts of business and after that he is the only person who has claims on the assets of the company. In partnership, two or more people operate the business and share the losses and the profits of the company. There are three types of partnerships which include general partnerships, limited liability partnership and limited partnerships. Third form of business is Corporation which is the for-profit limited liability. In a corporation, the owners of the business are known as shareholders of the business. Last form of business is known as Cooperative business which is also known as "co-op business" or "co-op", and this form of business has limited members and not the shareholders.
There are basically three forms of business organization. These are 1) Corporation, 2) Partnership and 3) Sole-proprietorship. Within the first two forms of business there are additional divisions which are related to tax reporting as opposed to the form of the business structure. A corporation is the most inclusive as a corporation can be a number of shareholders or one shareholder. It is recognized as a legal entity with limited liability for the shareholders usually which is what their stock is valued. A Partnership is any form of business that is more than 1 and not organized as a corporation. Partnerships can be a general partnership or a limited partnership. Partnerships are usually known for there unlimited liability for another partners acts or activities. A sole-proprietorship is an individual and anything more than one is a partnership if not organized as a corporation. There is also a limited liability company however this is a subclass of the business organizations as a LLC can be organized to report for tax purposes as a corporation, partnership or sole-proprietorship.