Chapter 1, Problem 7RQ

To determine

Business entity: A business organization which is created by one or more persons and governed by state law.

The following are the four types of business entities:

• Sole proprietorship: The form of business entity which is owned and managed by an individual is referred to as sole proprietorship.
• Partnership: The form of business entity which is formed by an agreement, owned and managed mutually by two or more individuals, who invest their assets in the business and share the liabilities and profits among themselves is referred to as partnership.
• Corporation: The form of business entity which is incorporated by state law into a separate legal entity, owned by stockholders, and managed by board of directors elected by stockholders is referred to as corporation.
• Limited-liability corporation (LLC): The form of business entity which is unincorporated but functions as a corporate and the owners are called members or partners. So, LLC has both the features of corporation and partnership.

To describe: The similarities and differences between sole proprietorship, partnership, corporation, and limited-liability corporation (LLC)