MGMT 1000 Chapter Notes - Chapter 4: Sole Proprietorship, Legal Personality, Limited Liability

• School: University of Guelph
• Department: Management
• Course: MGMT 1000
• Professor: Kathleen Rodenburg

Document Summary

Entrepreneur must consider the best forms of ownership: whether they run small farms, large factories, online, etc. Business owned and operated by one person. Business is considered extension of yourself (not a separate legal entity) Don"t need to register your business name. Tax benefits: most businesses suffer losses in this early stage. Since the business and the proprietor are legally the same thing, these losses can be deducted from income the proprietor earns from personal sources. Unlimited liability: personally liable for all debts. Lack of continuity: business dissolves if owner dies. Depends on resources of one person whose managerial and financial limitations may constrain the business. They find it hard to find start-up money banks fear they won"t be able to pay loans if things start to go bad. Two or more individuals agree to combine financial, managerial and technical abilities. Usually the extent of a sole proprietorship. Partnerships can invite more partners to join by investing money.