The fundamental forms of corporate ownership are as follows:
1. Sole Proprietorship
Having just one owner makes a company a sole proprietorship. The least expensive form of ownership is also simple to set up.
The owner is subject to unrestricted responsibility, which means that if the business can’t pay its debts, the owner’s assets could be at risk.
Small business entities typically use the sole proprietorship form.
2. Partnership
A partnership is an enterprise held by two or more people contributing financial resources. The partners split the company’s profits equally.
All partners in general partnerships are subject to unlimited responsibility. Limited partners’ assets are protected from creditors in limited partnerships.
3. Corporation
A corporation is a business organization with a separate legal personality from its owners. Shares of stock serve as a representation of ownership in a firm.
Owners (stockholders) have little liability but little say in how the business is run. The corporation’s operations are managed by the board of directors, a body elected by the stockholders.
Along with those fundamental kinds of corporate ownership, today’s organizations can also take the following forms:
4. Cooperative
A cooperative is a business organization owned by individuals and operated for their mutual benefit. The persons who make up the group are its members. Cooperatives may be incorporated or unincorporated.
Cooperatives include, but are not limited to, credit unions, cooperative banking, water and power (utility) cooperatives, and housing cooperatives. The largest fertilizer cooperative federation in the world, Indian Farmers Fertiliser Cooperative Limited (commonly known as IFFCO), is situated in India and is officially recognized as a Multistate Cooperative Society. IFFCO has 40,000 member cooperatives.