Profit oriented or commercial entities are those entities where the main aim of carrying out business is to earn profit for the owners of the business. Profit oriented entities are of following types:
- Sole Proprietorship
- Partnership
- Companies
Is the type of business is owned by a single individual. There may a number of employees of the business but ownership and risks and returns rest with a single owner. All assets and liabilities of the business are the assets and liabilities of the owner.
Partnership
Is the type of business that is owned by more than one person. These persons form a “Partnership Firm” through an agreement called “Partnership Agreement”. Partnership firms and agreements are governed by the Partnership Act 1932.
Companies
are separate legal entities formed under the Companies Ordinance 1984. The main
difference between companies or limited companies as they are commonly called is that companies are separate legal entities and the liability of the owners is also limited whereas characteristics are not there in case of sole proprietorship and partnership.
