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Types of business entity
A business entity is an organisation which sells a product or service, usually to make a profit. Different countries have different types of business entity. Most countries have similar types of business entity. The following list has a few examples of business entities which exist in the United Kingdom:
- Private company limited by shares (usually shortened to 'Ltd.'). Private limited companies are split into shares. Shareholders have limited liability. Shares cannot be offered to the general public.
- Public limited company (usually shortened to 'PLC'). Pubic limited companies are also split into shares. Unlike private limited companies, these shares can be sold and traded to the public. Just like private limited companies, shareholders have limited liability.
- Limited liability partnership (usually shortened to 'LLP'). Limited liability partnerships are owned by two or more people. These people have signed an agreement on how they will run the business, and how the profits will be split. All partners in an LLP have limited liability.