Editing Business (section)

== Forms <!--Linked from 'Company'--> ==
{{Main|List of business entities}}{{Companies law}}
Forms of business ownership vary by [[jurisdiction]], but several common entities exist:
* A [[sole proprietorship]], also known as a sole trader, is owned by one person and operates for their benefit. The owner operates the business alone and may hire [[employees]]. A sole proprietor has unlimited [[legal liability|liability]] for all obligations incurred by the business, whether from [[operating cost]]s or [[judgment]]s against the business. All [[asset]]s of the business belong to a sole proprietor, including, for example, a computer infrastructure, any [[inventory]], [[manufacturing]] equipment, or retail [[Fixture (property law)|fixtures]], as well as any [[real property]] owned by the sole proprietor.<ref>{{Cite web |title=What is a sole proprietorship |url=https://www.acra.gov.sg/how-to-guides/starting-sole-proprietorships/what-is-a-sole-proprietorship |access-date=2024-01-30 |website=Default |language=en}}</ref>
* A [[partnership]] is a business owned by two or more people. In most forms of partnerships, each partner has unlimited liability for the debts incurred by the business. The three most prevalent types of for-profit partnerships are [[general partnership]]s, [[limited partnership]]s, and [[limited liability partnership]]s.<ref>{{Cite journal|doi=10.5465/amj.2013.0581 |title=Friends and Profits Don't Mix: The Performance Implications of Repeated Partnerships |journal=Academy of Management Journal |volume=59 |issue=2 |page=460 |year=2014 |last1=Holloway |first1=S. S. |last2=Parmigiani |first2=A. |s2cid=168091169 }}</ref>
* [[Corporation]]s' owners have [[limited liability]], and the business has a [[legal personality]] separate from its owners. Corporations can be either [[State-owned enterprise|government-owned]] or privately owned, and they can organize either for profit or as [[nonprofit organization]]s. A privately owned, for-profit corporation is owned by its [[shareholder]]s, who elect a [[board of directors]] to direct the corporation and hire its managerial staff. A privately owned, for-profit corporation can be either [[privately held company|privately held]] by a small group of individuals, or [[public company|publicly held]], with publicly traded [[Share (finance)|shares]] listed on a [[stock exchange]].<ref>{{Cite web |title=What is a for-profit organization? Definition and examples |url=https://marketbusinessnews.com/financial-glossary/for-profit-organization/ |access-date=2024-01-30 |website=Market Business News |language=en-US}}</ref>
* A [[cooperative]] or co-op is a limited-liability business that can organize as for-profit or not-for-profit. A cooperative differs from a corporation in that it has members, not shareholders, and they share decision-making authority. Cooperatives are typically classified as either [[Consumers' co-operative|consumer cooperatives]] or [[worker cooperative]]s. Cooperatives are fundamental to the ideology of [[economic democracy]].
* [[Limited liability companies]] (LLC) and other specific types of business organization protect their owners or shareholders from [[business failure]] by doing business under a separate legal entity with certain legal protections. In contrast, a general partnership or persons working on their own are usually not as protected.<ref>{{Cite web |title=Choose a business structure |url=https://www.sba.gov/business-guide/launch-your-business/choose-business-structure |url-status=live |archive-url=https://web.archive.org/web/20201030073224/https://www.sba.gov/business-guide/launch-your-business/choose-business-structure |archive-date=2020-10-30 |access-date=2021-05-13 |website=[[Small Business Administration]] |language=en}}</ref>
* A [[franchising|franchise]] is a system in which entrepreneurs purchase the rights to open and run a business from a larger corporation.<ref>{{Cite news |last=Gleeson |first=Patrick |title=Definition of a Franchise Business |newspaper=Small Business – Chron.com |url=http://smallbusiness.chron.com/definition-franchise-business-446–.html |url-status=live |access-date=2016-11-25 |archive-url=https://web.archive.org/web/20161126064558/http://smallbusiness.chron.com/definition-franchise-business-4467.html |archive-date=2016-11-26}}</ref> Franchising in the United States is widespread and is a major economic powerhouse. One out of twelve [[retail]] businesses in the United States are franchised and 8 million people are employed in a franchised business.<ref>{{Cite journal |last1=Welsh |first1=Dianne H. B. |author-link1=Dianne Welsh |last2=Desplaces |first2=David E. |last3=Davis |first3=fAmy E. |year=2011 |title=A Comparison of Retail Franchises, Independent Businesses, and Purchased Existing Independent Business Startups: Lessons from the Kauffman Firm Survey |journal=Journal of Marketing Channels |volume=18 |page=3 |doi=10.1080/1046669X.2011.533109 |s2cid=154304180}}</ref>
* [[Private company limited by guarantee|Company limited by guarantee]] is commonly used where companies are formed for non-commercial purposes, such as clubs or charities. The members guarantee the payment of certain (usually nominal) amounts if the company goes into [[Liquidation|insolvent liquidation]], but otherwise, they have no economic rights in relation to the company. This type of company is common in [[England]]. A company limited by guarantee may be with or without having [[share capital]].
* A [[Private company limited by shares|company limited by shares]] is the most common form of the company used for business ventures. Specifically, a limited company is a "company in which the liability of each shareholder is limited to the amount individually invested" with corporations being "the most common example of a limited company."<ref name="Black's">Black's Law and lee Dictionary. Second Pocket Edition. Bryan A. Garner, editor. West. 2001.</ref> This type of company is common in England and many English-speaking countries. A company limited by shares may be a
** [[Public company|publicly traded company]] or a
** [[privately held company]].
* A company limited by guarantee with a share capital is a hybrid entity, usually used where the company is formed for non-commercial purposes, but the activities of the company are partly funded by investors who expect a return. This type of company may no longer be formed in the UK, although provisions still exist in law for them to exist.<ref>Companies Act 2006</ref>
* An [[unlimited company]] with or without a share capital is a hybrid entity, a company where the liability of members or shareholders for the debts (if any) of the company are not limited. In this case, the doctrine of a veil of incorporation does not apply.
Less common types of companies are:
* Most corporations by letters patent are ''[[Corporation sole|corporations sole]]'' and not companies as the term is commonly understood today.
* [[Royal charter|Charter corporations]] were the only types of companies before the passing of modern companies legislation. Now they are relatively rare, except for very old companies that still survive (of which there are still many, particularly many British banks), or modern societies that fulfill a quasi-regulatory function (for example, the [[Bank of England]] is a corporation formed by a modern charter).
* Statutory companies are certain companies that have been formed by a private statute passed in the relevant jurisdiction, and are relatively rare today.
"Ltd after the company's name signifies limited company, and PLC ([[public limited company]]) indicates that its shares are widely held."<ref>{{Cite web |last=Hargrave |first=Marshall |title=What Public Limited Company (PLC) Means in the U.K. |url=https://www.investopedia.com/terms/p/plc.asp |url-status=live |archive-url=https://web.archive.org/web/20180706103855/https://www.investopedia.com/terms/p/plc.asp |archive-date=2018-07-06 |access-date=2018-07-06 |website=Investopedia}}</ref>

In legal parlance, the owners of a company are normally referred to as the "members". In a company limited or unlimited by shares (formed or incorporated with a share capital), this will be the [[shareholder]]s. In a company limited by guarantee, this will be the guarantors. Some [[offshore jurisdictions]] have created special forms of [[offshore company]] in a bid to attract business for their jurisdictions. Examples include "[[Segregated portfolio company|segregated portfolio companies]]" and restricted purpose companies.

There are, however, many, many sub-categories of types of company that can be formed in various jurisdictions in the world.

Companies are also sometimes distinguished into [[Public limited company|public companies]] and [[Privately held company|private companies]] for legal and regulatory purposes. Public companies are companies whose shares can be publicly traded, often (although not always) on a [[stock exchange]] which imposes [[Listing (finance)|listing requirements]]/[[Listing Rules]] as to the issued shares, the trading of shares and a future issue of shares to help bolster the reputation of the exchange or particular market of exchange. Private companies do not have publicly traded shares, and often contain restrictions on transfers of shares. In some jurisdictions, private companies have maximum numbers of shareholders.

A [[parent company]] is a company that owns enough voting stock in another firm to control management and operations by influencing or electing its board of directors; the second company being deemed as a subsidiary of the parent company. The subsidiary company can be allowed to maintain its own board of directors.<ref name=":2" /> The definition of a parent company differs by jurisdiction, with the definition normally being defined by way of laws dealing with companies in that jurisdiction.<ref name=":2">{{Cite web |date=2021 |title=How a Parent Company Works: Types of Parent Companies |url=https://www.masterclass.com/articles/parent-company-explained |website=MasterClass}}</ref>