WHAT ARE THE DIFFERENT FORMS OF BUSINESS?
Sole Proprietorship
A sole proprietorship is owned and operated by a single individual. The owner is responsible for all debts and obligations of the business, and there is no legal distinction between the business assets and the owner’s personal assets.
Partnership
A partnership is a business operated by two or more individuals, called partners. Partners share the profits, losses, responsibilities, and decisions of the business. Each partner is personally liable for the debts and obligations of the business.
Limited Partnership
A limited partnership is a business operated by two or more individuals, called partners. Partners share the profits, losses, responsibilities, and decisions of the business. Each partner is personally liable for the debts and obligations of the business.
Corporation
A corporation is a business owned by shareholders and managed by a board of directors. Shareholders have limited liability, which means they are generally not personally responsible for the debts of the company beyond their investments in it. The company’s shares can be bought, sold, or traded privately and sometimes on a stock exchange if certain rigorous conditions are met.
Cooperative
A cooperative is a business owned and collectively managed by its members, who can be workers, consumers, or other businesses. Members typically have equal voting rights regardless of the number of shares held, and profits are distributed as dividends or reinvested in the business.
Each form of business has its own implications for liability, taxation, governance, and organizational structure. The choice of legal form often depends on factors such as the size of the business, the nature of its activities, business objectives, applicable regulations, and owner preferences.
