In simple terms, a business can be defined as trade done to earn money. Business cans either involve the selling of product or services. All businesses aim at gaining more and more profits. From ownership, businesses can be classified into seven categories.
1. Proprietorship: this is one of the simplest forms of business. In such kind of business the ownership lies with a single person. In such kind of business, owner and business are considered as a single entity.
2. Partnership: in such kind of business model two or more people share the ownership. People involved in a partnership may or may not have an equal share in the business. These kinds of businesses need to be registered with the state.
3. Limited partnership: limited partnership business is done by people who are interested in raising money from the investors. In such kind of partnership business the partners can be of two types:
• The general partner, who looks after daily business activities
• The limited partner, who is majorly associated with the investment in the business.
4. Corporation: its an independent form of business, which has many shareholders. These shareholders have stocks in the business. The government, as well as private companies, run such business.
5. Limited liability Company: This kind of business is a mix of corporation and proprietorship. In this business, all the owners are known as members.
6. Nonprofit organization: This kind of business is more focused in fulfilling their responsibilities towards the society. They are a charitable organization which works for well being of the society.
7. Cooperative: In such kind of businesses shares are held by the members of the cooperative. These businesses may aim or may not aim at earning a profit. They are further classified as:
• Worker cooperatives
• Consumer cooperatives