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Canada (509,275)
Business (3,286)
BU111 (655)
Lecture

Political Factors cont'd.docx

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Department
Business
Course
BU111
Professor
Roopa Reddy
Semester
Fall

Description
Forms of ownership - Traditional forms of ownership o Sole proprietorship o Partner ship o Corporation - Public vs. Private corporations - Other forms… o Co-operative - Form of ownership will likely change over life of business Sole Proprietorship - Owned and operated by one single person, business and owner = one legal entity - Your full responsible for what is happening in that business - Lemonade stand to steal firm (vary greatly) Advantages Disadvantages Easy to form Taxed as personal income (advantage if business has losses – you can write off your losses as your own) Few regulations Unlimited liability - you are responsible for any losses that the company faces – you can’t write them off as something separate Complete control over profits and decisions Lack of continuity – hard to pass along Government support (advice) Limited managerial and financial resources Freedom to work on your own, for yourself by Difficult to obtain outside financing yourself Partnership - Two or more owners - Business and owners = one legal entity - E.g. accountants, engineers, lawyers, etc - Enables further growth, than if you were just a sole proprietorship Advantages Disadvantage Easy to form – partnership agreement Taxed as personal income (advantage is business has losses) Few regulations Unlimited Liability ** - can be harder because there are more than one person. – if one partner incurs debt than everyone in the ownership is liable for that money owed More managerial and financial resources Lack of continuity, difficult to transfer ownership – everybody has to agree to it Government support (advice) Difficult to obtain outside financing Easier to borrow money Shared profits and decisions – conflicts Types of partnerships - General Partnership o All partners have joint and several liability o All workings day to day with the company – managing  Joint liability – together share liability  Several liability – 1 may be liable for all - Limited Partnership o Limited partners liability = investment – you can’t be liable for anything more than your investment o Not involved in management of the company o Limited partners cannot be active in management o At least one general partner Corporations - Separate entity from owners (shareholders) - Its liable for its own debt - Types: o Public – start with IPO - initial public offering  IPO: It’s the first time shares are available to sale for the general public o Private – normally started as private --- you have control over who has shares – better as most people don’t want to buy shares of small companies they don’t know  E.g. cirque du soleil o Crown – Canada post, CBC, CNR, LCBO
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