List of legal entity types by country facts for kids

A business entity is like a special group or organization that people create to do things together, usually to make money by selling products or services. Sometimes, these groups are formed for charity work or other activities allowed by law. Think of it as setting up a team to achieve a goal, but with official rules.

There are many different types of business entities around the world. The rules for each type can be different depending on the country or even the state. Some common types include:

• Corporations: These are like separate "legal people" from their owners.
• Cooperatives: Groups owned and run by their members, often for a shared benefit.
• Partnerships: When two or more people agree to share a business.
• Sole traders: A business owned and run by just one person.
• Limited liability companies: A popular type that protects owners from being fully responsible for the business's debts.

The type of business entity chosen affects how much responsibility the owners have and how the business is managed.

Different Ways Businesses Are Set Up

When people want to start a business, they have to choose how it will be legally set up. This is important because it decides how much responsibility the owners have for the business's debts and how the business pays taxes.

Single-Person Businesses

A sole proprietorship (sometimes called a sole trader) is the simplest type of business. It's owned and run by just one person. This person is fully responsible for all the business's debts. If the business owes money, the owner's personal savings or property could be at risk. It's easy to set up, but there's no legal separation between the owner and the business.

• In Albania, this is called a Zyrë e përfaqësimit (representative office).
• In Australia, it's a Sole Proprietorship.
• In Germany, it's an Einzelunternehmen (individual entrepreneur).

Businesses with Multiple Owners

When two or more people want to work together, they can form a partnership. In a general partnership, all partners share the profits and losses, and they are all fully responsible for the business's debts. This means if the business fails, each partner could lose their personal assets.

A limited partnership is a bit different. It has at least one "general partner" who has full responsibility for debts, and one or more "limited partners" whose responsibility is only for the money they invested. Limited partners usually don't get to manage the business.

• In Argentina, a general partnership is a Soc.Col.. A limited partnership is an S.C.S..
• In Canada, you can have a GP (General Partnership) or an LP (Limited Partnership).
• In Germany, a general partnership is an Offene Handelsgesellschaft (OHG), and a limited partnership is a Kommanditgesellschaft (KG).

Companies with Limited Responsibility

Many businesses are set up as companies or corporations. The main idea here is "limited liability." This means the owners (called shareholders) are only responsible for the money they invested in the company. If the company goes into debt, their personal assets are usually safe.

There are two main types of companies:

• Private Limited Company (Ltd.): This type of company is owned by a smaller group of people, and its shares are not sold to the general public on a stock exchange.

* In the United Kingdom, this is often called a Ltd. * In Albania, it's a Sh.p.k. * In China, it's a Company with limited liability. * In the United States, a similar type is a Limited Liability Company (LLC).

• Public Limited Company (PLC): These companies can sell their shares to the public on a stock exchange. This allows them to raise a lot of money from many investors. Because they are public, they have more rules and need to share more information about their finances.

* In the United Kingdom, this is called a PLC. * In Argentina, it's an S.A. * In Australia, it's an Ltd. (though this can also be a private company). * In Japan, a Kabushiki Gaisha (K.K.) is the most common type of public company.

Special Types of Businesses

Cooperatives

A cooperative is a business that is owned and controlled by its members, who use its services or products. The goal is to meet the needs of the members, not just to make a profit for investors. For example, a group of farmers might form a cooperative to sell their produce together.

• In Brazil, it's a Cooperativa.
• In Finland, it's an Osuuskunta (osk).
• In the United States, they are often called Co-Op or Coop.

Non-Profit Organizations

Some entities are created not to make money, but to serve a social goal, like charities, educational groups, or community associations. These are called non-profit organizations. They don't have owners who share profits, and any money they earn goes back into their mission.

• In Austria, a Verein is a non-profit association.
• In France, an Association is a non-profit association.
• In Israel, an Amuta is a voluntary association for non-profit purposes.

Government-Owned Businesses

Some businesses are owned and run by the government. These are often called state-owned enterprises or public enterprises. They might provide essential services like electricity or transportation.

• In Argentina, an S.E. is a state-owned enterprise.
• In Finland, a Valtion liikelaitos is a commercial government agency.
• In Russia, a GP or GUP is a state (unitary) enterprise.

How Rules Change by Country

Even if two countries have similar types of business entities, the exact rules for setting them up and running them can be very different. For example, the minimum amount of money needed to start a public company can vary a lot.

• In Austria, a public limited company (AG) needs at least €70,000 in capital.
• In Czech Republic, a public limited company (a.s.) needs CZK 2,000,000 (about €80,000).
• In Germany, a public limited company (AG) needs €50,000.
• In Iceland, a public limited company (hf.) needs IKr 4,000,000 (about €26,100).
• In the United Kingdom, a public limited company (PLC) needs £50,000 (about €58,000).

These differences show why it's important for businesses to understand the specific laws of each country where they operate.