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ADMS 2610 (400)
Lecture

ADMS 2610 Lecture Notes - Limited Liability Partnership, General Partnership, Sole Proprietorship


Department
Administrative Studies
Course Code
ADMS 2610
Professor
Robert Levine

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FORMS OF BUSINESS
Sole proprietorship
- Operated by one individual
- If carried on by the individual in its own name- no registration
If carried on by the individual in other names- required to register under the Ontario business
names act
- Responsible for everything-management and all contracts and licencing ( vendors licence,
dealers licence), certificate for sales tax (GST)
- If the employee under the proprietor commits tort- employer is vicariously liable for all liabilities
- Pay his own incometax
- From liability side- worst possible business- because a sole proprietor is liable for all contracts,
income tax, retail sales tax, GST.
And a judgement can be enforced against the proprietor
Partnership
- two or more individuals carrying on a business for a common profit (make money)
- Governed by the Ontario partnership act
- Partnership act is a general statute applying to all cases where there is no agreement between
the partners, which is called the partnership agreement- it sets out the requirement, methods of
dissolution, interest.
But all of these can be superseded by the partnership act.
- Usually unless otherwise stated in the partnership agreement, dissolves by the death of the
partner, insolvency of the partner.
- Sometimes partnership can come to an end when a partner charges the partnership as a second
debt.
- Majority of the provisions can be over written by the partnership act, specially in the case where
there is no agreement between the partners.
- Types:
a. General partnership- one partner can bind the other partners in the partnership to the debt,
liability or tort committed
No requirement to be registered under the business name act
A general partnership cannot sue or defend against a partnership name unless registered. In
which case, the plaintiff can sue against all the partners individually
There is two forms of liability-
Joint and several there are 3 partners in the firm A, B and C and the firm is indebted
by contract to D who wants to sue . D can sue C alone for 300,000 , or B or C alone,
Alternatively by BC, CA, or AB. Or by all together.
Joint means that each partner is liable for the whole amount, so that the plaintiff
can sue one, a few or all partners.
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