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Briefly define the terms proprietorship, partnership, and corporation.
A proprietorship is a business possessed by one person.
Two or more people who unite together to form a business make up a partnership. This can be done on an informal foundation without a written partnership agreement, or a contract can spell out the responsibilities and rights of each partner.
A restricted liability company is a hybrid between a corporation and a partnership. Profits and losses pass through to the members. Members generally enjoy limited liability.
Corporations are legal entities that are separate from their owners. To form a corporation the owners stipulate the governing rules for the running of the business in a contract known as the articles of incorporation. They propose the articles to the government of the state in which the corporation is formed, and the mention issues a charter that creates the separate legal entity.
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