Profit motive organizations fall in three broad categories:
- Sole trader (sole proprietor)
- Limited Liability Company
Sole trader is dictatorship where single person pursues business activities for his/her own economic well-being.
Partnership involves participation by more than one person.
Limited Liability Company
Limited liability company is of two types:
- Public Limited
- Private Limited
Public limited company is listed in stock exchange or market.
Private limited company is not listed in stock exchange.
Public limited company should not be confused with public sector organizations. Public sector organization is run by government.
Both public and private limited companies are separate legal entity. Limited means shareholders have limited liability for his/her debts to the amount of capital invested in the form of shares in the company.
- Sole Trader Vs Partnership Vs Limited Liability Company
- Advantages & Disadvantages of Types of Business Organizations
- ACCA F1 FAB Sole Trader, Partnership, Limited Liability Company
- What is Holding Company, Explanation, Definition and Meaning
- What is Corporations, LLC and Company Definition and Meaning