What Are the 4 Types of Ownership?

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Types of Business Ownership

  • Sole Proprietorship: A business owned by one person with no distinction between personal and business finances.
  • Partnership: Two or more people sharing ownership, profits, losses, and liabilities.
  • Corporation: A legal entity separate from owners, with shareholders enjoying limited liability.
  • Cooperative: Jointly owned by members who share decision-making, profits, and losses.

Characteristics of Business Ownership Structures

  1. Sole Proprietorship

    • Very simple to operate.

  2. Partnership

    • Allows partners to share responsibilities, skills, and resources.

  3. Corporation

    • Owners have limited liability for business debts and obligations.

  4. Limited Liability Company (LLC)

    • Combines elements of partnerships and corporations, providing limited personal liability and operational flexibility.

Choosing the Right Business Structure

Your business structure impacts liability protection, taxes, and more. Selecting the appropriate business structure ensures you can run your business effectively and plan for future growth. The most common types of business ownership structures include sole proprietorships, partnerships, corporations, and limited liability companies.

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