Business is an activity where an enterprise makes a profit by producing and buying and selling products or services. It creates a company, a corporation, a partnership, or any such formal organization it ranges from a street peddler or hawkers to General Motors.
Most businesses are operated through a separate entity such as a corporation or a partnership or a limited company.
Where two or more individuals venture a business together, having the same goals and ethics, they will be treated as a general partnership: a partnership agreement if one is created, and partly jurisdiction’s law where the Partnership is located. A single person who runs a business is commonly known as a sole proprietor, whether they own it directly or through a formally organized entity.
Let’s talk about the popular business forms people often take up:-
Type 1- Sole Proprietorship:
The first type is Sole proprietorship. A sole proprietorship, which is also known as a sole entrepreneur, is PO by one person and operates for his benefit. The owner looks after the business all alone but may hire employees for assistance. A sole proprietor has all the liability for the business obligations, whether from operating costs or proceeds against the business. All the business assets belong to a sole proprietor, for example, any inventory, a computer infrastructure, retail fixtures, or manufacturing equipment, as well as any estate owned himself.
Type 2- Partnership:
A partnership is a business owned by two or more people. In almost all partnerships, each partner has unlimited liability for the business’s debts and assets built by the enterprise.
Type 3- Corporation:
The forms of the Corporation have has a separate legal entity from its owners. Corporations can be government-owned or privately owned. And it can be a nonprofit organization as well. A privately owned, for-profit Corporation is always owned by its shareholders, who elect a board of directors for decision making at the Corporation and hire its managerial staff. The same can again be privately owned by few people publicly held, with publicly traded shares listed on a stock exchange.
Type 4- Cooperative
A cooperative is underquoted a “limited-liability” business that can be either for-profit or not-for-profit.
A cooperative is different from a corporation in that it has members and not shareholders as it is in a corporation, and they share decision-making authority. Cooperatives are usually classified as worker cooperatives or consumer cooperatives. Cooperatives are part of the fundamentals of the idea of economic democracy.
Be it Limited liability companies (LLC) or limited liability partnerships, and other specific types of business organizations, they protect their owners or shareholders from business failure by doing business under a separate legal entity with certain legal protections.
Type 5- Franchises
A franchise is a system where entrepreneurs purchase the rights to open and run a larger corporation. Franchising in the United States is widespread and is a major economic powerhouse.
To run a business, one needs to choose a suitable firm among the above available options first, to begin with.
