What Are Forms of Business?

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Overview of Different Forms of Business Organization:

  • 1. Sole Proprietorship

    • The most common form of business with complete owner control. The owner is personally liable for all financial obligations and debts.

  • 2. Partnerships

    • Unincorporated organizations with two or more partners designed to balance risks and returns.

  • 3. Corporations

    • Separate legal entities owned by shareholders offering limited liability but complex to form and dissolve.

  • 4. Limited Liability Company (LLC)

    • Combines aspects of partnerships and corporations with members having limited personal liability.

Basic Forms of Business Ownership:

  1. Sole Proprietorship

    • Owned by one individual. Easy to set up and least costly among all forms of ownership.

  2. Partnership

    • Owned by two or more persons who contribute capital to conduct business.

  3. Corporation

    • A separate legal entity owned by shareholders.

Main Types of Businesses:

  • 1. Service Businesses:

    • Provide intangible products like skills, labor, or expertise in return for fees.

  • 2. Merchandising Businesses:

    • Buy products at wholesale prices and sell at retail prices to consumers.

  • 3. Manufacturing Businesses:

    • Produce tangible goods from raw materials.

Main Forms of Business Organization:

  1. Sole Proprietorship
  2. Partnership
  3. Corporation
  4. Limited Liability Company (LLC)

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