Limited Liability: The maximum amount a person participating in a business can lose or be charged in case of claims against the company or its bankruptcy. A stockholder in a corporation can only lose his/her investment, and a limited partner can only lose his/her investment, but a general partner can be responsible for all the debts of the partnership. Parties to a contract can limit the amount each might owe the other, but cannot contract away the rights of a third party to make a claim.
Corporation: an organization formed with state governmental approval to act as an artificial person to carry on business (or other activities), which can sue or be sued, and (unless it is non-profit) can issue shares of stock to raise funds with which to start a business or increase its capital. One benefit is that a corporation's liability for damages or debts is limited to its assets, so the shareholders and officers are protected from personal claims, unless they commit fraud.
Real Estate Investment trust (nick-named REIT): a real estate investment organization which finds investors and buys real property and gives each investor either a percentage interest in the property itself or an interest in a loan secured by a mortgage or deed of trust on the property. Usually the loan is used to develop the property and build upon it, and then there is a division of profits upon sale-if there is a profit.
Corporation: an organization formed with state governmental approval to act as an artificial person to carry on business (or other activities), which can sue or be sued, and (unless it is non-profit) can issue shares of stock to raise funds with which to start a business or increase its capital. One benefit is that a corporation's liability for damages or debts is limited to its assets, so the shareholders and officers are protected from personal claims, unless they commit fraud.
Real Estate Investment trust (nick-named REIT): a real estate investment organization which finds investors and buys real property and gives each investor either a percentage interest in the property itself or an interest in a loan secured by a mortgage or deed of trust on the property. Usually the loan is used to develop the property and build upon it, and then there is a division of profits upon sale-if there is a profit.
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