All the people in this world need money for their survival and without making money they cannot do any work or buy anything in their life. To make money, they need to work hard in an organization or a company. Most of the people dislike working in other companies and make Business on their own. They simply defined business as a technique of making money out of things or products. It is the activity of buying and selling goods and services for money. They make it for both profit entities and non-profit organizations. The profit entity includes the money-making process, and non-profit organizations are for a social cause or charitable missions.
Types of business
There are four major types of business structures found. They are as follows,
Sole proprietorship:It is one form of business that is mainly owned and run by a single person for their own purpose of getting benefits. In this form, the owner himself has full control over the business and they handle all the profits and losses made on them. They act as the deciding authority and can decide on their own, getting no external ideas and pressures.
Partnership: It is the form in which two or more persons combine to start a business and they are partners. The partners equally share the investments in a common ratio, and it refers to the person who provides an initial amount of working capital to the owner. The profits got in this process are shared equally between them and they are equally responsible for any liabilities and loss got. A single partner cannot take their own decision and they should discuss with other partners before taking any type of decision.
Corporation: It is the type in which the group of people combines and act as a single organization or entity. In this, they consider the owners as a shareholder who makes considerations for the company’s common stocks. The owner of this business has unfavorable rules of taxation and financial liabilities of obligations. To start this, type the person must provide the articles of incorporation that include details like location, name, and number of issued shares, and the primary purpose of starting this business. It is of three types: C, S, and Non-profit Corporation.
Limited liability company (LLC): It is the combination of both aspects of corporations and partnerships. It helps in retaining the tax benefit of partnership and liability benefits of the corporations. This process helps in protecting the owners from debts and operations of the business.