Using a summarised explanation, explain all terms used in business ownership
Business ownership refers to the legal rights and responsibilities of individuals or entities who own and operate a business. There are several types of business ownership, including sole proprietorship, partnership, corporation, and limited liability company.
- Sole proprietorship: A business owned and operated by one individual. The owner has complete control over the business and is personally liable for its debts and obligations.
- Partnership: A business owned and operated by two or more individuals. Each partner shares in the profits and losses of the business and is personally liable for its debts and obligations.
- Corporation: A business entity that is legally separate from its owners. Shareholders own the corporation and elect a board of directors to oversee its operations. Shareholders have limited liability for the debts and obligations of the corporation.
- Limited liability company (LLC): A business structure that combines the limited liability of a corporation with the flexibility and tax benefits of a partnership. Owners of an LLC are called members and have limited liability for the debts and obligations of the company.
Overall, business ownership involves the legal rights and responsibilities of individuals or entities who own and operate a business, and it can take various forms depending on the structure of the business.