BU231 Lecture Notes - Lecture 19: Privately Held Company, Canada Pension Plan, South African Class 19 4-8-2
Document Summary
Choosing the appropriate form of business organization: sole proprietorship, partnership. Sole prop/ partnership come into existence without government involvement: corporation. Corporation may only be formed by following the steps outline in legislation. Now corporations can be formed with a single shareholder or director. Therefore corporations are viable alternative for sole prop/ partnerships. Two or more people carrying on a business with a view to profit. Advantages: pool knowledge, skills, physical and financial resources. Disadvantage: dishonesty, incompetence of one member may lead to losses suffered by the other member. With a view to profit (sharing of profit) is an essential element of partnership. The receipt of a share of the profits of the business is strong evidence of a partnership. Pay an employee or agent of the business as part of his remuneration. Repay a loan under which the lender is to receive. Corporations (public, private, professional , not for profit)
