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The types of business enterprise.

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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.

ii) Co-operative.

 

  • 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.
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