Introduction This paper provides an overview of the outline of the three legal forms of business ownership, and summarizes the features of businesses owned by employees and families, as well as not-for-profit organizations defining and describing the concepts application.
Objectives
The goal 7, in chapter 5 introduces the concepts of the levels of corporate management, outlining what are the three main legal forms of business ownership and summarize the features of businesses owned by employees and families, as well as not-for profit organizations.
Methodology/Concepts: definition Regardless of its size, every business is organized according to one of three categories of legal structure: sole proprietorship, partnership, or corporation. A sole proprietorship is owned and operated by one person; while a partnership consists of two or more persons carrying on a business for profit. The business is not a separately taxed entity, but rather, a conduit where the profit or losses of the partnership flow through to the partners. Partnerships are relatively easy to set up, but they do not offer protection from liability. A corporation is a legal entity that is separate and distinct from its owners. Investors receive shares of stock in the firm. The most important aspect of a corporation is limited liability, what means owners have no legal and financial liability beyond their individual investments. In a businesses owned by employees are another alternative in creating a corporation, in which workers buy shares of stock in the company that employs them. There are two trends underlie the rise in employee ownership. One is that employees want to share in whatever profit their company earns. Second is that company executives want employees to care deeply about their firm’s success and contribute their best effort. Family-owned businesses may be structured