Management and Organizational Studies 2275A/B Chapter Notes - Chapter 14: Limited Liability Partnership, Sole Proprietorship, Legal Personality

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 2275A/B
• Professor: Philip King

Document Summary

Types of business organizations: sole proprietor, partnership, corporation. Sole proprietor an unincorporated business organization that has only one owner. Most often used in small businesses/home based enterprise. Financial liability: any obligation of the business is a personal obligation to the owner, e. g. if the owner borrows money from the bank, it"s the owner who promises to repay the loan, not the business. Profit sharing: all the profits after taxes accrue to the sole proprietor alone, this motivates the owner to seek to ensure the success of the business. Decision making: solely makes all the decisions of the business very quick, if the owner dies, the business dies. Source of capital: has limited access to capital. Taxation: since the sole proprietorship is not a legal entity separate from the owner, there are no formal tax rules governing it, profits and losses are reported on the owner"s personal income tax return.