Equity markets are all about business ownership, but not all businesses have the same structure. Let's take a look at some of the corporate and business structures that are commonly used around the world, but do note that there are a lot more than what we are going to cover here. Let's begin with sole proprietorships. They're the simplest form of business where one individual owns all the assets and is personally responsible for the liabilities, so there is no separation between the business and the owner's personal assets, meaning the owner has unlimited liability for business debts. Moving on to partnerships, we see a collective endeavor where liability and profits are shared. Partnerships are formed by two or more individuals, the partners who agree to operate a business together, the partners share profits, losses, and management responsibilities. In general partnerships, each partner has unlimited liability for the debts of the business. In the case of a limited partnership, there are two types of partners, general partners with unlimited liability and limited partners with liability limited to their investment. Limited partners typically do not participate in the management of the business.

A corporation is a legal entity that is separate and distinct from its owners who are known as shareholders. It is recognized by law as having its own rights and responsibilities, and it can own assets, incur liabilities, sue, or be sued, and enter into contracts among other things, the creation of a corporation involves a legal process known as incorporation, where the company's founding details are registered with the relevant governmental or regulatory authority. Some of the key advantages of setting up a business as a corporation are limited liability. Shareholders have limited liability for the debts and actions of the corporation. Their personal assets are protected, and they can only lose the money they've invested in the corporation. Perpetual existence corporations continue to exist even if ownership or management changes, and they do not cease to exist when a shareholder dies or sells their shares. Credibility, incorporation can add legitimacy and credibility to a business which can be beneficial in establishing relationships with customers and potential investors. The concept of corporations provides the foundation for the equity markets.