LAW 122 Chapter Notes - Chapter 21: Limited Liability Partnership, Sole Proprietorship, Limited Liability

• School: Ryerson University
• Department: Law and Business
• Course: LAW 122
• Professor: Leigh Lampert

Document Summary

Sole proprietorship: exists when a person carries on business on their own, without adopting any other form of business organization. The sole proprietor is responsible for performing all contracts entered into in the course of the business. The sole proprietor is exclusively responsible for all torts committed personally in connection with the business . That person is also vicariously liable for all torts committed by employees in the course of their employment. For income tax purposes, the income or loss from the sole proprietorship is included with the income or loss from other sources in calculating the sole proprietors personal tax liability. Main advantage of a sole proprietorship is that it is simple and easy to set up, it is equally easy to dissolve, but the main disadvantage of it is unlimited personal liability, and limited nancing options. Unlimited personal liability: the third parties may take all the sole proprietors personal assets to satisfy the business"s obligations.