FBLA Banking and Financial Systems Practice Test 2025 - Free Practice Questions and Study Guide

A joint-stock company is a type of company where the capital is divided into shares that can be bought and sold by individuals. This structure allows multiple investors to own a portion of the company through the purchase of shares, which can provide opportunities for raising capital and sharing profits. Shareholders in a joint-stock company have limited liability, meaning they are only responsible for the company’s debts up to the amount they invested in shares.

In contrast, a non-profit organization does not operate for profit and typically relies on donations, grants, and fundraising rather than issuing shares. A sole proprietorship is owned and run by a single individual, who is personally liable for all business debts, without the division of ownership through shares. A limited liability company combines features of sole proprietorships and corporations, allowing for limited liability and tax efficiencies, but it does not issue shares in the same way a joint-stock company does.