ADMS 2610 Lecture Notes - Lecture 7: Sole Proprietorship, Profit Sharing, Decision-Making

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Sole proprietorship: one owner remains responsible for all debts and managerial acts. Tax benefit (don"t have to file separate business tax report) Lack of continuity (business dissolves if owner dies) Difficultly in raising capital (no stocks or investments) Partnerships: two or more persons carrying on business in common with a view to profit. ~ profit sharing is prima facie evidence of the existence of a partnership. Partners possess greater interest in the wealth of the company over employees. = contractual relationship, founded on mutual trust, a partner is a agent of other partners. But a partnership may occur for the purposes of a 3rd party by estoppel. Joint and several liability: partners as a group have liability for the debts of the business. Every partner may bind the business to a 3rd party unless 3rd party knew they had no authority. If a tort is committed during the course of partnership business (fraudulent misrepresentation, negligence)

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