Types of Business

There are many different types of business. Every business has to follow some rules and laws to be managed. A business has to be managed with legitimate products. Businesses can be divided in several ways according to the demand for the product. As many successful businessmen as there are in the world, all of them first ran their business alone with their products. It is important to know what type of business you will run according to the type of your business. 

Types of business are:

• • • Sole Proprietorship
    • Partnership
    • Limited Liability Company (LLC)
    • Corporation.

Sole Proprietorship

The business which is run by one person is called Sole Proprietorship. This business has to bear all the responsibility. No one else has to be accountable for anything. Sole proprietorship requires a license approved by the government. Annual tax is paid to the government. The business is called an independent business.

• Small Capital / Large Capital 
• Unit Management 
• Unit Supply 
• Determining product price 
• Sales growth 
• Achieving unit profit 
• Individual freedom 
• Annual tax payment.

Partnership

The business which is conducted with one partner is a partnership. Partnership businesses have to be conducted according to the law. Two partners must be registered with the official stamp. As per the law, the business will be accountable. In the case of banking, the bank account and all the work must be done with this deed, then there will be no single ownership. The profit and loss of the company must be shared equally. If the company has debt, both partners must bear it. If one doesn’t want to pay, the debt has to be paid from personal assets. Trading in legitimate products from a balanced relationship makes partnership trading very profitable. By applying talent and hard work, it is possible to create large industries over time. 

• Running a business with two people
• Sharing the work 
• Conducting according to law and deed 
• Having equal capital 
• Equal profit and equal loss should be shared 
• All business activities should be kept in writing.

Limited Liability Company (LLC)

A small business can provide management and business services through an owner. It is very popular for tax benefits. LLC is not a company that can be held personally liable. All members of the company can file personal taxes and returns. If the owner is a single person, no return has to be submitted. Only ownership tax has to be paid. 

• The business should be a registered company 
• There will be no personal liability; everyone will be accountable 
• The number of members can be from 2 to 20 
• Managed through managing responsibility 
• Shareholders pay tax on income
• Profits and losses are distributed equally.

This business is run as a   proprietorship and partnership to make it a trustworthy institution.

Corporation

A corporation means a limited company. The business is conducted with shareholders and partnerships. It is a limited company with registration and a license approved by the government.

Shareholder

To establish a company, manpower and capital have to be increased. When the demand for the company’s products increases, the company grows. At the same time, the value of the company increases. Shareholders are created by selling shares to introduce the company to the global market. Shareholders have to follow the rules and laws of the company.

• Ownership is distributed through shares 
• Profit/loss of the company is distributed according to the shares 
• The owners are not directly responsible for the company’s debts 
• Capital can be raised by selling company stock 
• Personal assets are protected 
• Shares can be sold at any time. 
• Shareholders are bound by contract. These shareholders are bound by certain laws.