There are three main types of trading organisation :

Sole Trader

The business is owned in your name - your retain the profits and are responsible for all liabilities

Partnership

The business is owned by two or more participants - profits are shared on an agreed % basis. The responsibility for liabilities is held by all participants.

Limited Company

Shareholders own shares in the business - profits are earned by the business. Income is earned by the shareholders by way of dividends. Directors (who may be the shareholders) are paid a salary. Shareholders are only personally liable for any debts to the extent of their unpaid share capital.