This is Bob Doughty with the VOA Special English EconomicsReport.

Businesses are structured to meet different needs. One basicdifference involves who is responsible for the business. Anotherinvolves how long the organization can stay in business. Today webegin a report about ways that businesses are organized under UnitedStates tax law.

The simplest form of business is called an individualproprietorship. The word proprietor comes from French and Latinwords for property owner. The proprietor owns all the property ofthe business and is responsible for it. This means the proprietorreceives all the profits.

But this also means that the proprietor is responsible for allthe debts of the business. Also, any legal action against anindividual proprietorship is taken against the owner. The lawrecognizes no difference between the owner and the business.

Most small businesses in the United States are individualproprietorships. The Census Bureau says there are more thetwelve-million of them. United States tax law has simpler reportingrequirements for these kinds of businesses. One person may be ableto complete all the tax documents required.

Another kind of business is the partnership. Two or more peoplego into business together. An agreement is usually needed to statehow much of the partnership each person controls. They can end thepartnership at any time.

But partnerships and individual proprietorships have a limitedlife. They exist only as long as the owners are alive.

Some states permit what are called limited liabilitypartnerships. These have full partners and limited partners. Limitedpartners may not share as much in the profits. But theirresponsibilities to the organization are also limited.

A partnership is often called a pass-through entity: money passesthrough it to the individual partners. The federal government doesnot tax partnerships. But the partners are taxed on the paymentsthey receive.

Doctors, lawyers and accountants often form partnerships to sharethe profits and risks of doing business. A husband and wife can forma business partnership. The Census Bureau says there are more thanone-million American partnerships.

Partnerships and individual proprietorships are usually smallbusiness organizations. Next week, we discuss a bigger kind: thecorporation.

This VOA Special English Economics Report was written by MarioRitter. This is Bob Doughty.