MGMT 200 Lecture Notes - Sole Proprietorship, General Partnership, Kpmg
Document Summary
If you"re starting a new business, you have to decide which legal form of ownership is best for you and your business. Before discussing the pros and cons of these three types of ownership, let"s address some of the questions you"d probably ask yourself in choosing the appropriate legal form for your business. In a sole proprietorship, you make all important decisions and are generally responsible for all day-to-day activities. In exchange for assuming all this responsibility, you get all the income earned by the business. Profits earned are taxed as personal income, so you don"t have to pay special federal and provincial income taxes. For many people, however, the sole proprietorship is not suitable. The flip side of enjoying complete control has to supply all the talents necessary to succeed. You also have to rely on your resources for financing: in effect, you are the business, and any money borrowed by the business is loaned to you personally.
