Business is a word which we listen or speak almost every day. It is an activity for making money and profit. Business expands itself to a wide range from a street peddler to general motors. In simple words producing or buying and selling products including goods and services is called business. It is not necessary that one needs company or any kind of corporation to do business. And the interesting fact about business is it has also become digital now. People now days prefer to do online business such as Bitcoin trader
Risk factors- Before we talk more about the business we should know about the risk factors involved in the business. One thing to be kept in mind before thinking of starting a business is the owner of the business is responsible and liable for all debts incurred by the business. Creditors can always go after the owner’s personal belongings if the business acquires debts. So the owner is always under the risk factor. The company, on the other hand, provides more protection and benefits for the owner. Here are some common business entities we should know about:
1 Sole trader or sole proprietorship- This means that the business is owned by one person who operates the business alone and may sometimes hire employees. In this system, the owner has unlimited liability for all obligations incurred by the business. Assets like computer infrastructure, manufacturing equipment belong to the sole proprietor.
2 Partnership- The business owned and managed by two or more than two people is called partnership. In this system of business, both the partners enjoy all the liabilities. And both are equally responsible for all the business movements.
3 Corporation- In this type of business the owners of the business have limited liability and the business enjoys different personality from its owners. These corporate organizations can be either government-owned or privately owned.
4 Cooperative- This is a limited liability business and can be organized for profit or – not-for-profit.
5 Franchises- In this system entrepreneurs purchase the right to open and run a business from a larger corporation. This system has become very common these days especially in the United States and has given jobs to many people.
Some more about companies- Companies are also categorized as public companies and private companies. The shares of the public company can be traded publicly. This is not the case with private companies as they do not have publicly traded shares. These companies contain a restriction on transfers of shares.