Describe the characteristics of sole proprietorships, partnerships, limited partnerships, and joint ventures

The characteristics of each business types are given below:      

Explanation:

Sole Proprietorship is the type of business in which the liability is limitless. Due to this issue, the owner is solely responsible to pay off the debts of company from his personal owned assets if the business goes bankrupt.

Partnership is just like sole proprietorship but here the partners are the only responsible persons to payoff the debt of the company because the liability is limitless. The burden of the company debts is equally shared among the partners.

Limited Partnership is less risky because the liability is limited and only the amount invested in the business is subjected to the payment of borrowings from the lenders. The limited partner is responsible for his actions which means if his misdeed resulted in fine then it would be paid from his share first and then the other partners are equally liable for compensation if their is still any amount left. The resources of all the partners help to grow the business and the best resource here is the partner's knowledge in the core operation of the business.

In the case of Joint Venture, two or more than two limited liability companies jointly invest in a single project by pooling their resources in it to gain maximum benefit out of the business. So as the limited liability companies are the partners in the joint venture, the liability is limited and the burden of the payment of the liability falls on the company partners. So the investor is not subjected to pay the debts of the company because the limited liability company is a separate entity and is solely liable to pay for its debts.