A business is defined as any entity or organization that engages in commercial, professional, or industrial activities for profit. Businesses may be for-profitable entities or non-profitable ones that engage in social causes or to meet a social objective. There are many categories of businesses, such as partnerships, joint ventures, franchise, licensing, and brokerage firms. A partnership is a group of two or more people that share equal interests and responsibilities.
A business can be established through a number of different ways; the most common being that a corporation is created by signing a written agreement known as an ‘Articles of Organization’. A partnership is formed by more than one individual, and a sole proprietorship is a sole ownership entity. However, the term ‘sole proprietorship’ is not legally considered a valid definition of the term ‘business’ because a partnership has an equal partnership interest with others. In contrast, the term ‘sole proprietorship’ is only legally defined when the owner is the sole owner of the business.
There are three basic differences between a corporation and a partnership; there is no publicly traded share, there is no right to vote, and there is no ‘power of attorney’. Also, in the case of a corporation, there is limited liability. Limited liability is important in the case of any lawsuits against the company because if there is a lawsuit, the liability of the corporation cannot be increased from the shareholders unless the court approves the increase. However, in the case of a limited liability partnership, there is no liability if the partners do not agree to the formation of the partnership. These differences are important aspects of the formation of a business.