MGTA01H3 Lecture Notes - Lecture 8: Sole Proprietorship, General Partnership, Limited Liability

• School: UTSC
• Department: Management
• Course: MGTA01H3
• Professor: Chris Bovaird

Document Summary

Liberal market economy, most motivated to work hard if they do not have to face government and have government interference (smith) This belief was brought into canada, to make it easy for entrepreneurs. More capital than a few people can supply. The economic system need mechanisms to create and finance these kind of business. Ways in which backers who support idea of a business can provide the capital: Unlike sole proprietorships and general partnerships: these do require some paperwork, need money, requires a little bit of regulation and fees. A partnership with 2 classes of partners: Entrepreneur (s) has idea and expertise but entrepreneur needs more capital ($) General partner must comply with "limited partnership act" General partner has to address the limited partner to everyone so they could not be sued in the future etc. The law forbids "limited partners" from working in managerial or decision making capacity. Limited partners, forbidden from making decisions, have limited liability.