LAW 122 Lecture Notes - Lecture 5: Limited Liability Partnership, Limited Partnership, Fiduciary

• School: Ryerson University
• Department: Law and Business
• Course: LAW 122
• Professor: Sari Graben

Document Summary

Types of business organizations: sole proprietorships, general partnerships, limited partnerships, corporations. Liability and benefits of entrepreneurs and other stakeholders differ depending on type used. Arises once person begins to conduct business: e. g. sta(cid:396)t (cid:272)utti(cid:374)g so(cid:373)eo(cid:374)e"s la(cid:449)(cid:374) fo(cid:396) (cid:373)o(cid:374)ey. No separation between business and proprietor (owner): proprietor entitled to all income, proprietor liable for all obligations, prop(cid:396)ieto(cid:396)"s assets a(cid:448)aila(cid:271)le fo(cid:396) (cid:271)usi(cid:374)ess de(cid:271)ts, business income(loss) on personal income, proprietor cannot be employee of business. Advantages: simple to start; simple to administer, possible tax advantages. Disadvantages: unlimited personal liability, can only raise money by personal borrowing, as business grows, these problems continue to grow. Conclusion: a sole proprietor is best suited for small businesses. No fo(cid:396)(cid:373)al (cid:396)egist(cid:396)atio(cid:374)s as a (cid:862)sole p(cid:396)op(cid:396)ieto(cid:396)ship(cid:863) is (cid:396)e(cid:395)ui(cid:396)ed. (cid:894)co(cid:373)pa(cid:396)e this incorporation, where formal steps are required. ) But sole proprietors must comply with the general requirements imposed on all businesses. E. g. (cid:373)ay (cid:374)eed to (cid:396)egiste(cid:396) a (cid:862)doi(cid:374)g (cid:271)usi(cid:374)ess as(cid:863) dba (cid:374)a(cid:373)e.