ABSTRACT
This chapter explains the characteristics of the most commonly used forms of enterprises. It discusses sole proprietorship; partnership; and limited liability company. The chapter focuses on the reserves of the limited company and addresses the question of how a reserve originates. A sole proprietorship has a single owner, called the proprietor, who often manages the business. As to its accounting, each proprietorship is distinct from its owner: the accounting records of the proprietorship do not include the proprietor’s personal records. The general partnership is an association of two or more persons who co-own a business with the aim to make profit. The limited partners have limited liability for partnership debts. Their liability is limited to their investment in the business. The chapter defines the terms statutory dividend, dividend stabilization and bonuses.
