Types of business
Businesses vary in the nature of their owners, the rules that govern them, and their structure. Therefore, there are four main types of businesses:
Sole Proprietorship
It is a registered company owned by only one person. This type of business is considered the simplest type, and this type provides financial protection. and legal to the owner, as ownership does not create Individuality is the legal identity of the company; rather, the owner of the business shares the same corporate identity, and thus the owner of the company is responsible for all the obligations of the company.[١]
The employer chooses this type of business if he wants complete control over the company, as this type is inexpensive on a personal and individual level, and there are some advantages provided by this type of business; such as tax advantages, as the company’s income and returns are considered personal income, and are subject to taxes only once, and the process of organizing this type is relatively few requirements.[١]
partnership
The company is usually owned by two or more people, and the owners of this business are called (partners), and the income of this company is treated as group Income for partners; therefore, it is taxed once just like a sole proprietorship.[٢]
In which the partners are all responsible for the obligations of this company, however there are several types of business partnerships where there are some nuances between them, which are:[٢]
- Public Partnerships
The easiest type of partnership; each partner is a partner in the company's operations, each partner has unlimited liability, each partner's personal assets can be used to pay the company's obligations, and each partner is fully responsible for the actions of any other partner.
- Limited Partnerships
In these companies, there is a partner called the (general partner), who is responsible for the partnership in general, and bears all the company’s operations. The limited partner within this company also bears the amount of responsibility equal to his financial share in the business. However, the limited partners do not interfere in decisions or management within the company; they do not have any type of direct control within it.
- Limited Liability Companies
In this business each partner is responsible for business operations, but the partners are not personally liable. About the actions of other partners or the company's debts, and this type is limited to a certain type of profession, such as law and accounting.
Limited Liability Company
It is considered one of the most flexible types of the previous types, as this type of business combines aspects of all types of partnerships; as the partners retain the tax advantages of sole proprietorship and the limited liability of companies, and these institutions are able to choose between different tax treatments.[٣]
the reviewer
- ^ A for “Types of Businesses”, corporatefinanceinstitute, Retrieved 28/1/2022.
- ^ A for “4 Types of Business Partnerships: Which Is Best for You?”, score, Retrieved 28/1/2022.
- ↑ Jason Fernando, “Limited Liability Company (LLC)”, investopedia, Retrieved 28/1/2022.
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