27 Mar 2012
Department
Course
Professor
Business Organization: Chapters 26 & 27
Three Kinds of Business Organization
1. Sole Proprietorship
1. Owned and operated by 1 individual
2. Laws Affecting Sole Proprietorships
i. Separate accounts (HST)
ii. Trust monies (WSIB, CPP, EI)
iii. Licensing (bylaws, zoning)
iv. Business act (using somebody else’s name)
3. Liability of sole proprietorships
i. The owner is responsible for everything
2. Partnership *final
1. Definition: 2 or more persons carrying on business in common with a
view to a profit
i. broad
2. Partnership Agreements and the Partnerships Act”
i. Can be verbal. Don’t have to be written down
ii. Death of one person or bankruptcy without a written
agreement means partnership dissolves
iii. Either partner can terminate the partnership through writing
without written agreement
iv. All profits will be shared equally
v. No new partners without the consent of the original partners
vi. Assignment of partners
vii. If the partnership owns the property, neither partner should
be using the property personally
3. Liability of Partners
i. Liability of Partnerships Generally
1. Each partner is liable to the full extent of the ________
2. Called Joint and Several Liability
3. Apparent Authority
ii. Retired Partners
1. Have to make effort to tell others that you are no longer
part of the partnership
2. Holding out
iii. Limited Liability Partnerships (LLPs) *know this
1. Only applicable to professionals
2. Have to have written agreement stating that you have a
LLP
3. Have to include LLP in name (so that the public knows)
4. Have to register as a LLP
5. Only liable to full extent of your own personal mistakes
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