How would you define each of the five business organizations?
The five types of business organizations are:
Sole proprietorship: The simplest and least expensive form of business organization. The owner has unlimited liability for all debts and liabilities. It is subject to minimal government interferences. The profit of the firm goes to the owner. The problem with sole proprietorship is that the owner faces unlimited liability.
General Partnership: A general partnership can be defined as an association between two or more people. It is also relatively simple to form. In a general partnership, the individual liability for debts is the partner's share of the total amount of debts accrued by the partnership.
Limited Partnership: A limited partnership is also association of two persons, with at least one general partner and one limited partner. In a limited partnership, a limited partner can be held liable for only the amount of money he or she invested in the company.
Limited Liability Company: A limited liability company (LLC): is a type of business ownership combining several features of corporation and partnership structures. Owners of a LLC have the liability protection of a corporation. A LLC exists as a separate entity much like a corporation. Members cannot be held personally liable for debts unless they have signed a personal guarantee.
Corporation: A corporation is recognized as a completely separate legal entity from the owners. In the eyes of the law, a corporation is considered a person, someone who can sue and be sued, and a person who can conduct business on its own behalf. A corporation protects the shareholders from any debts and liabilities of the corporation. Because a corporation is a separate legal entity, the owners can implement pension, profit sharing, and...