BU111 Final: Forms of Business ownership Includes advantages and disadvantages for sole proprietorship, public and private corporations, and partnerships. Need to know this for the final exam
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Need to be able to compare and contrast different forms of. Sole proprietorship (74% of canadian business, 9% sales) High levels of personal incentive, freedom and satisfaction. Difficulty in raising capital (banks reluctant to hand out loans) Lack of continuity (if the owner dies, so does the business) Incorporated business owned and operated by more than one person for their private profit. Always formed by agreement, either written or oral (written is the safest way though); partnership agreement. Partnership agreement is a legal document that outlines all of the rights and responsibilities of the partners. Designed to prevent future ill will and misunderstanding between partners. Process to be followed if adding or withdrawing a partner. Joint liability: all partners are equally liable for debts of the business. Several liability: if ones assets are insufficient to cover their share of debt, their partners are expected to pay more. They are forbidden by law to take an active role in management.
