A defining difference in what makes a firm a sole proprietorship, partnership, or a corporation is the nature of ownership and accountability for each type of business

A sole proprietorship is a kind of firm or business owned by an individual or a proprietor and is accountable for all the business activities. That is, he or she owns all the assets and profits and is in charge of all liabilities and debts used within the business.

A partnership is a legal business owned by two or more people in possession of legal agreements that bind the partners to the firm. The partners share equal rights and responsibilities that make them accountable in the operations of the firm. These include profits, capital, as well as decision making.

A corporation is a legal state chartered firm owned by stakeholders or shareholders who in turn elect a board of directors who are accountable of management operations like decision making, policy making as well as the general activities.