MGTA01H3 Lecture Notes - Lecture 10: Sole Proprietorship, Limited Liability, General Partnership
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Document Summary
Joint/several liability: both partners are responsible for liability even if action is caused by one partner: need to know/trust your partners, partnership agreement: document which partners sign in case of conflict. Simple forms: sole proprietorship & general partnerships appropriate for businesses that, don"t need much capital, don"t need many people, are low risk (unlikely to be sued) How are corporations created: creating a corporation does require some paperwork, the founder (the incorporators) must complete some legal documents, a corporation is created by the legal authority (e. g. prov. of ontario), complete the articles of incorporation : Invent a name: provide an address (for tax purposes) Indicate number of shares authorized : submit the articles + to province, the province issues certificate of incorporation , the certificate creates the legal entity which is a corporation . Corporations sell shares: the corporation can sell shares to anyone who wants to invest.
