|
|
Types of Business Organization.
Business organization is designed to provide goods and/or services to consumers with the purpose to earn profit that will increase the wealth of its owners and grow the business itself.
Sole proprietorship is a business owned by one person. The owner may get the business done all him or her or may employ others. The owner of the business has personal liability of the debts incurred by the business.
Partnership is a form of business in which two or more people operate for the common goal which is often making profit. In most forms of partnerships, each partner has personal liability of the debts incurred by the business.
There are 3 classifications of partnerships:
1. General partnerships.
2. Limited partnerships.
3. Limited liability partnerships.
A corporation is either a limited or unlimited liability entity that has a separate legal personality from its members. A corporation can be organized for-profit or not-for-profit.
Corporation is owned by multiple shareholders and is overseen by a board of directors, which hires the business’s managerial staff.
In addition to privately-owned corporate models, there are state-owned corporate models.
Cooperative is a limited liability entity that can organize for-profit or not-for-profit. A cooperative differs from a corporation in that it has members, as opposed to shareholders, who share decision-making authority.
Cooperatives are typically classified as either consumer cooperatives or worker cooperatives. Cooperatives are fundamental to the ideology of economic democracy.