Briefly describe the terms proprietorship, partnership, and corporation.
A proprietorship is a business owned by one person.
- Two or more people who join together to develop a business make up a partnership. It can be done on an informal basis with no a written partnership agreement or a contract can spell out the rights and responsibilities of each one.
- A restricted liability company is a hybrid among a partnership and a corporation. Profits & losses pass through to the members. Generally, Members enjoy restricted liability.
- Corporations are legal entities split from their owners. To build a corporation, the owners indicate the governing rules for the running of the business in a contract termed as the articles of incorporation. They submit the articles to the government of the state wherein the corporation is created, and the state issues a charter which creates the separate legal entity.