Having decided that it makes sense for you to become an entrepreneur and start up your own small business, the next major decision confronting you is the form of business ownership. Briefly describe the four major types of business ownership forms.

Question

What will be an ideal response?

Answer 1

The first type is the sole proprietorship: this is the oldest and most common form of business ownership. It is a business owned, operated, and managed by one individual. The sole proprietor may hire employees, but the sole proprietor is the owner and the boss. The next basic form is the partnership: A partnership is the association of two or more persons to carry on as co-owners of a business. In many ways partnerships are very similar to sole proprietorships, except with the issues that rise with more than one owner. The next basic form of business ownership is the corporation: corporations are legal entities unto themselves: they enjoy the ability to do almost everything that an individual can do, but the owners are not liable for the debts of the corporation. This is known as the corporate veil. The final business form is the limited liability company. This form of business ownership is relatively new and very attractive for many. It provides most of the benefits of a partnership, but the partners are not liable for any business debts, and yet can participate in the operation of the company.