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Briefly define the terms proprietorship, partnership, and corporation.
Ans: The term proprietorship is used as a business owned by one person.
Two or more than two people who join together to form a business build up a partnership. This can be done on an informal basis with no a written partnership agreement, or a contract can spell out the rights and tasks of each partner.
A limited liability company is a hybrid among a corporation and a partnership. Profits and losses pass by to the members. Members usually enjoy limited liability.
Corporations are legal entities that are separate from their owners. To make a corporation, the owners specify 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 where the corporation is formed, and the state issues a charter which makes the separate legal entity.
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