Types of Business Ownership
What are the three basic types of business ownership, from least to most complicated?
A) Corporation, Partnership, Sole Proprietorship
B) Sole Proprietorship, Partnership, Corporation
C) Partnership, Sole Proprietorship, Corporation
D) Sole Proprietorship, Corporation, Partnership
Final answer:
The three main types of business ownership structures are sole proprietorship, partnership, and corporation. The first is the simplest and is owned by one person, the next involves a group of partners sharing ownership and responsibility, and the last is more complex and involves the company being owned by shareholders and run by a board of directors. Option B is correct.
Explanation:
The three basic types of business ownership, from least to most complicated, are: Sole Proprietorship, Partnership, and Corporation (Answer B).
A sole proprietorship is the simplest and involves one individual who owns and operates the entire business. It is owned by the person who runs it on a daily basis, although hired managers can also run it.
A partnership involves two or more people who share ownership of the business. Each partner contributes to all aspects of the business and shares in profits and losses.
A corporation is the most complex type of business ownership. A corporation is considered as a separate entity distinct from the individuals who compose it. The firm is owned by shareholders who elect a board of directors to hire top day-to-day management. Corporate governance watches over the top executives of the corporation.