It typically takes the form of a single individual in business as the sole owner of the company.
In many cases, the owner of the sole proprietorship is also the only employee as well, though this doesn't have to be the case.
Contracts between the partners may shift the liability to certain members within the partnership, but there is no way to shift the liability to the business itself.
Other forms of partnerships exist, though they are less common than general partnerships.
This may leave you wondering which is the best entity type for your business or even asking, "What are different types of business ownership?
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" It can be very confusing if you aren't familiar with the different types of ownership and the advantages or disadvantages of each.
Certain business types may open you up to legal and financial liabilities, though they also give you more control over the company as a whole.
Others may reduce this liability but have up-front creation costs and more oversight at the state or federal level.
Limited liability companies create a separate legal entity that can bear at least some of the liability for debt and legal action, reducing or eliminating the liability faced by the business owner or owners.
The business structure is similar to a corporation, yet the business itself is much less structured than a full corporation and provides the owners with the same sort of flexibility that one sees with a general partnership.