LAW 122 Chapter Notes - Chapter 21: Fiduciary, Registered Office, Professional Negligence In English Law
21 Apr 2018
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Important implications in relationships between the business and the other stakeholders. The sole proprietor is exclusively responsible for performing all contracts entered into the course of the business. The sp is responsible for all torts committed personally in connection with the business. The income tax purposes, the income or loss from the sp is included with the income or loss from other sources in calculating the sp"s personal tax liability: advantages of sp. Possible tax advantages: disadvantages of sp. Unlimited personal liability- third parties may take all the sp"s personal assets to satisfy the business"s obligations. Can only raise money by personal borrowing. As business grows, these problems continue to grow: therefore, a sp is only suited for small businesses. That is why companies switch to different forms when they start to grow. Legal requirements for sp: no formal registration as a sp is required, sp must comply with the general requirements imposed on all businesses.
