Types of Business Owners:

1. Single Proprietorship

- A type of business entity that is owned and run by one individual. Sole
proprietorships are one of the most common types of legal structure for small
businesses because it is easy to form and gives you complete control of your
business. It occurs when someone does business activities but doesn’t
register as another kind of business. There is no separate business entity,
meaning there is no separation between the business owner’s personal and
professional assets and liabilities. You can be held personally accountable for
the debts and obligations of the business.
- Sole proprietorships can be a good choice for low-risk businesses and
owners who want to test the business idea before forming a more formal
business.

2. Partnership

- A partnership is an arrangement between two or more people to oversee

business operations and share its profits and liabilities. It is a form of business
where two or more people share ownership, as well as the responsibility for
managing the company income or losses the business generates. In a
partnership, the owners sign a formal agreement that clearly states a
partner’s rights, shares and responsibilities.

- Partnerships are typically divided into limited liability and unlimited liability
partnerships. In a limited liability partnership, individual partners don’t accept
losses caused by another, meaning one partner’s possessions can’t be
seized or sold to pay for the other partner’s debts. In an unlimited liability
partnership, both partners are responsible for the business. If one partner is
directly responsible for a loss, all other partners pay for the debt, even if they
were not directly involved or responsible for the losses.

3. Corporation

- A corporation involves individuals forming a group to manage a business. In

this kind of ownership, assets and liabilities are kept separate from its owners.
This means they offer the most protection in terms of personal liability. In
case of loss, the owners only lose the amount they invested.
- The two types of corporations are C-corps and S-corps. The major difference
among the two is the tax treatment of the two entities. A corporation is a good
structure for a business owner looking for a little more risk, good funding
options, and the prospect of eventually “going public,” which means the
company will eventually sell stock to the public.