i) Limited liability joint stock company.
- Many people (shareholders) provide capital in varying amounts.
- Shareholders receive a share of the profits in proportion to the amount they have invested.
- The shareholders financial responsibility to the company is limited to the value of the shares they own.
- Other property held by the shareholders may not be taken to cover claims by the company’s creditors.
- There are two types, public and private.
- Membership organizations that must have a minimum number of members.
iii) Sole trader.
- A single person company with few legal requirements making it easy to set up.
- The owner provides the capital and bears all the risk.
- The owner also controls the whole business and takes all the profit.
iv) Charitable institution.
- Must be legally registered as a charity.
- Usually benevolent and attract the sympathies of potential donors.