LIFE'S A PITCH - types of businesses

Partnership

A partnership is an arrangement where parties agree to cooperate to advance their mutual interests.

Since humans are social beings, partnerships between individuals, businesses, interest-based organizations, schools, governments, and varied combinations thereof, have always been and remain commonplace. In the most frequently associated instance of the term, a partnership is formed between one or more businesses in which partners (owners) co-labor to achieve and share profits and losses (see business partners). Partnerships exist within, and across, sectors. Non-profit, religious, and political organizations may partner together to increase the likelihood of each achieving their mission and to amplify their reach. In what is usually called an alliance, governments may partner to achieve their national interests, sometimes against allied governments who hold contrary interests, such as occurred during World War II and the Cold War. In education, accrediting agenciesincreasingly evaluate schools by the level and quality of their partnerships with other schools and a variety of other entities across societal sectors. Partnerships also occur at personal levels, such as when two or more individuals agree to domicile together, while other partnerships are not only personal but private, known only to the involved parties.

Partnerships present the involved parties with special challenges that must be navigated unto agreement. Overarching goals, levels of give-and-take, areas of responsibility, lines of authority and succession, how success is evaluated and distributed, and often a variety of other factors must all be negotiated. Once agreement is reached, the partnership is typically enforceable by civil law, especially if well documented. Partners who wish to make their agreement affirmatively explicit and enforceable typically draw up Articles of Partnership. It is common for information about formally partnered entities to be made public, such as through a press release, a newspaper ad, or public records laws.

While partnerships stand to amplify mutual interests and success, some are considered ethically problematic. When a politician, for example, partners with a corporation to advance the corporation's interest in exchange for some benefit, a conflict of interest results. Outcomes for the public good may suffer. While technically legal in some jurisdictions, such practice is broadly viewed negatively or as corruption.

Governmentally recognized partnerships may enjoy special benefits in tax policies. Among developed countries, for example, business partnerships are often favored over corporations in taxation policy, since dividend taxes only occur on profits before they are distributed to the partners. However, depending on the partnership structure and thejurisdiction in which it operates, owners of a partnership may be exposed to greater personal liability than they would as shareholders of a corporation. In such countries, partnerships are often regulated via anti-trust laws, so as to inhibit monopolistic practices and foster free market competition. Enforcement of the laws, however, is often widely variable. Domestic partnerships recognized by governments typically enjoy tax benefits, as well.

Limited

A limited company is a company in which the liability of members or subscribers of the company is limited to what they have invested or guaranteed to the company. Limited companies may be limited by shares or by guarantee. And the former of these, a limited company limited by shares, may be further divided into public companies and private companies. Who may become a member of a private limited company is restricted by law and by the company's rules. In contrast anyone may buy shares in a public limited company.

Limited companies can be found in most countries, although the detailed rules governing them vary widely. It is also common for a distinction to be made between the publicly tradable companies of plc type (for example, the German Aktiengesellschaft (AG), Czech a.s. and the Mexican, French, Polish and Romanian S.A.), and the "private" types of company (such as the German GmbH,Polish Sp. z o.o., the Czech s.r.o. and Slovak s.r.o.).

Corporation

A corporation is a separate legal entity that has been incorporated through a legislative or registration process established through legislation. Incorporated entities have legal rights and liabilities that are distinct from their employees and shareholders, and may conduct business as either a profit-seeking business or not for profit business. Early incorporated entities were established by charter (i.e. by an ad hoc act granted by a monarch or passed by a parliament or legislature). Most jurisdictions now allow the creation of new corporations through registration. In addition to legal personality, registered corporations tend to have limited liability, be owned byshareholders who can transfer their shares to others, and controlled by a board of directors who are normally elected or appointed by the shareholders.

In American English the word corporation is widely used to describe large incorporated businesses. In British English and in the commonwealth countries, the term limited company is more widely used to describe the same sort of entity while the word corporationencompasses all incorporated entities. In American English, the word company can include entities such as partnerships that would not be referred to as companies in British English as they are not a separate legal entity.

Despite not being human beings, corporations, as far as the law is concerned, are legal persons, and have many of the same rights and responsibilities as natural people do. Corporations can exercise human rights against real individuals and the state, and they can themselves be responsible for human rights violations. Corporations can be "dissolved" either by statutory operation, order of court, or voluntary action on the part of shareholders. Insolvency may result in a form of corporate failure, when creditors force the liquidation and dissolution of the corporation under court order, but it most often results in a restructuring of corporate holdings. Corporations can even be convicted of criminal offenses, such as fraud and manslaughter. However corporations are not considered living entities in the way that humans are.