A business that legally has no separate existence from its owner
The sole proprietorship is the simplest business form under which one can operate a business. The sole proprietorship is not a legal entity. It simply refers to a person who owns the business and is personally responsible for its debts. A sole proprietorship can operate under the name of its owner or it can do business under a fictitious name, such as Nancy’s Nail Salon. The fictitious name is simply a trade name–it does not create a legal entity separate from the sole proprietor owner.
A partnership is a form of business where two or more people share ownership
A partnership is a form of business where two or more people share ownership, as well as the responsibility for managing the company and the income or losses the business generates. That income is paid to partners, who then claim it on their personal tax returns – the business is not taxed separately, as corporations are, on its profits or losses.
There are three types of partnerships:
- General partnership
- Limited partnership
- Joint venture
A private limited company, or LTD, is a type of privately held small business entity.
A private limited company is a type of business entity in “private” ownership used in many jurisdictions, in contrast to “public” ownership, with some differences from country to country. Private limited companies have a limited number of employees which normally is 50.
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