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Lecture 2

ADM 1101 Lecture Notes - Lecture 2: Sole Proprietorship, Canadian Business, Environmentalism

Course Code
ADM 1101
John Palmer

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Week 2:
Macroenvironment of Canadian Business
Businesses drive the economy of a nation. In Canada, the economic system is a private enterprise
system. The rights of a private enterprise system are private property, freedom of choice, profits
and competition.
Canadian Private Sector Forms of Business Ownership
Sales partnership is presented in a simple form and available to anyone able to bind in a contract.
It falls under provincial/municipal jurisdiction. Owned and operated by one person. The
advantages of a sole proprietorship include: cheap, secrecy, flexible, no special taxes, no
government regulations and more. Some disadvantages include: unlimited liability, limited
financial resources, requires a lot of time and commitment, limited growth and more.
Partnership includes two parties combining some or all resources in a business and sharing its
profits. As per provincial laws, it is required that a partnership must legally register its name and
give info about the partners.
There are two types of partnerships, general and limited. General is where partners are liable in
equal share for debts in addition is liable for the full amount. Each member can bind the partnership
without the consent of the other party. Limited is composed of partners who conduct the business
and those who contribute in actual cash. Special partner’s liability is normally limited only to the
amount of the cash they contributed to the partnership.
Limited Partners
Silent partners are those who are known to the public however don’t carry an active management
role. Secret partners are those who are unknown to the public but take an active management role.
Nominal partners lend their name for the public relations but aren’t actually involved in the
business. Finally, Dormant partners are neither known or active.
The Partnership
Having a partnership can portray many advantages and disadvantages. There could be more capital
provided, sharing management, combining skills and more. On the other hand, there is more
liability and responsibility for actions done, profits are shared, there may be some disagreements
Canadian Private Sector Forms of Business Ownership
Corporation can be incorporated federally or provincially. If it lies under the laws of Canada, it
can carry the business anywhere throughout Canada. A federal company cannot be prevented from
doing its practices such as doing business in a province by a provincial government.
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