LAW 122 Chapter 21: Basic Forms of Organizations - Chapter 21

• School: Ryerson University
• Department: Law and Business
• Course: LAW 122
• Professor: Theresa Miedema

Document Summary

Sole proprietorship: when a person carries on business on their own, without adopting any other form of business organization. Basic implications of sole proprietorships (tax and finance aspects) Exclusively responsible for performing all contracts entered into in the course of the business, including contracts with customers, suppliers, employees, and lenders. 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: vicarious liability occurs when an employer is held liable for a tort that was committed by an employee. 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 proprietor"s personal tax liability. Simple and easy to setup easy to dissolve or close: the sole proprietor simply just stops carrying on business.