Types of Business
Businesses differ in terms of their ownership and size. The following are types of businesses:
1. Sole proprietorship: Sole proprietorship is an individual-owned business with 100% ownership. The owner uses personal capital, bears all risks, and receives rewards. Sole proprietorship has unlimited liabilities, with personal assets at risk in case of default.
2. Partnership: Partnership, as the name suggests, is a collaboration of two or more individuals who co-jointly bear the business's risk. The partners are the joint owners of the business and the stakes of each partner can be divided as per the agreement.
3. Public limited companies: A public limited company raises funds through share issuance. Shares represent ownership and grant rights as stated in the company's memorandum of association.