Basic forms of ownership
Although forms of business ownership vary by jurisdiction, there are several common forms:
- Sole proprietorship: A sole proprietorship is a business owned by one person. The owner may operate on his or her own or may employ others. The owner of the business has unlimited liability of the debts incurred by the business.
- Partnership: A form of business owned by two or more people. In most forms of partnerships, each partner has unlimited liability of the debts incurred by the business. There are three typical classifications of partnerships: general partnerships, limited partnerships, and limited liability partnerships.
- Corporation: A limited liability entity that has a separate legal personality from its members. Corporations can be either privately-owned or government-owned, and can be organized as either for-profit or not-for-profit. A privately-owned corporation is owned by private individuals while a public corporation is owned by multiple shareholders and is overseen by a board of directors, which hires the business's managerial staff.
- Cooperative: Often referred to as a "co-op", a cooperative is a limited liability entity that can organize for-profit or not-for-profit. A for-profit cooperative differs from a for-profit corporation in that it has members, as opposed to shareholders, who share decision-making authority. Cooperatives are typically classified as either consumer cooperatives or worker cooperatives. Cooperatives are fundamental to the ideology of economic democracy.