There are many types of organizations. We can separate them into two major divisions: organizations existing to create profits (profit organizations. Includes business entities) and organizations that exist primarily for another purpose (non-profit organizations. E.g: charity organizations).
3 Types of Business Entities and their common characteristics:
1. Sole Proprietorships.
Sole proprietorships are business that are owned and operated by one person: the sole proprietor. The owner and the business, is then the same. For tax purposes, a sole proprietorship is not a taxable entity, and any profits earned by the business are taxed on the return of the individual. The proprietor must develop an accounting system that distinguishes between his/her personal affairs and that of the business.
2. Partnerships.
Partnerships are businesses that are owned by two or more individuals. For small partnerships, the agreement is often an oral agreement between the partners but it is highly recommended that the agreement be formalized as is done in bigger partnerships like public accounting firms and most law firms. In partnering up with individuals in...
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