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Legal Forms of Business Introduction to the types of business, everything from sole proprietorship to public corporation. includes examples and diagrams/charts

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Jim Mc Cutcheon

L7BU11112102011Legal Forms of Business OwnershipMost of the advantages and disadvantages of these come from a legalistic perspectiveUnincorporated The law today in Canada does not differentiate between the owner of an unincorporated business and the business itselflegally seen as being one and the sameif a business becomes bankrupt creditors may take personal assets since individual and business are one and the samethis unlimited liability of owners is the biggest disadvantage to unincorporated businesses Sole ProprietorshipBusiness that is owned or operated by one person for hisher private profit PartnershipBusiness that is owned or operated by more than one person for their private profitIncorporatedPrivate cant sell shares to publicPubliccan sell shares to the publican entity created by law that has a legal status which is both separate and distinct from that of its owners and possessing all of the rights of an individuala newly created corporation is a new legal entitybankruptcy gives creditors the right to take only corporate assets not the personal assetsmajor advantage is the limited liability which protects all personal assetscreates a sort of corporate veil between corporations assets and personal assetsPersonal vs Corporate Tax Systemunlike the personal tax system corporations are taxed in Canada on the basis of a fixed rate systemregardless of how much money the corporation makes tax rate is the sameFederal Tax 18 Ontario Tax 12 Total Tax 30Unincorporated businesses are legally viewed as a component of the total income of the owners therefore taxed same as income
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