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Types of Business Organizations

Types of business organization
Types of business organization

Many might be confused what is the business organisations. It is the type of management or administration of a business in short. When starting a business a owner will go through many legal formalities and one among them is choosing the type of business organizations. Mainly there are 5 types of business organisations.

Types of business organizations

1. Sole Proprietorship

A sole proprietorship is the most basic and easiest type of business to establish. There’s no deffrence between the business and you (the owner). You’re entitled to all the profits and is also responsible for all your business debts, losses and liabilities.

2. Partnership

A partnership is a single business where two or more people share ownership. The decisions have mainly made by all the partners for the welfare of the business. Each partner contributes to all aspects of the business, including money, property, labor or skill. In return, each partner shares in the profits and even losses of the business.

3. Corporation

The shareholder owns the independent legal entity of corporation. This clearly means that the corporation itself are not the shareholders who owns it but also held legally liable for the actions and debts the business incurs.
Corporations are more complex than other business structures because they tend to have costly administrative fees and complex tax and legal requirements.

4. Limited Liability Company (LLC)

A limited liability company (LLC) is a hybrid type of legal structure that provides the limited liability features of a corporation and the tax efficiencies and operational flexibility of a partnership.
The owner of an LLC also referred to be a member. Depending on the state, the members can be a single individual (one owner), two or more individuals, corporations or other LLCs.

5. Cooperative

A cooperative is a business or organization owned by and operated for the benefit of those who are using its services. They’re common in healthcare, retail, agriculture, art and restaurant industries. Profits and earnings generated by the cooperative are distributed among the members, who are also known as user-owners.

So these where the Organisation of business. Many types of organizations had not been included beacuse of there low popularity.

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