COMMERCE 1E03 Chapter Notes - Fall 2014 Chapter 6 - Limited liability
Sole proprietorship: a business that is owned, and usually managed, by one person. Partnership: a legal form of business with two or more parties. Corporation: a legal entity with authority to act and have liability separate from its owners. Unlimited liability: the responsibility of business owners for all of the debts of the business. General partnership: a partnership in which all owners share in operating the business and in assuming liability for the business debts. Limited partnership: a partnership with one or more general partners and one or more limited partners. General partner: an owner (partner) who has unlimited liability and is active in managing the firm. Limited partner: an owner who invests money in the business but does not have any management responsibility or liability for losses beyond the investment. Limited liability: the responsibility of a business"s owners for losses only up to the amount they invest; limited partners and shareholders have limited liability.