The four major types of business organizations are; sole proprietorship, partnerships, corporation, and cooperative. A sole proprietorship is a business owned by one person. The owner may operate on his or her own or may employ others. A Partnership is a form of business in which two or more people operate for the common goal of making a profit. Each partner has total and unlimited personal liability of the debts incurred by the partnership whereas a corporation is a limited liability enterprise with a separate legal personality from its members. A corporation may be owned by multiple shareholders. The other major business type is a cooperative which is a limited liability entity that has members who share decision-making authority.
While the liability of a sole proprietor and partners in a partnership is unlimited, those of the other business organizations are limited to the amount owed. This makes cooperatives and corporations investments with lower risks as compared to sole proprietorships and partnerships.
The advantage that partnerships and sole proprietorships have over cooperatives and corporations is that decision making and implementation is quick due to their small structure and numbers of concerned persons in decision making.