AFM231 Chapter Notes - Chapter 14: Limited Liability Partnership, Sole Proprietorship, Limited Liability

• School: University of Waterloo
• Department: Accounting & Financial Management
• Course: AFM231
• Professor: Robert Timberg

Document Summary

Forms of business organization: choosing how to own a business determines in large part who: Is financially liable for business: shares in business profits and other assets, makes and is accountable for management decisions. The sole proprietorship: sole proprietorship an unincorporated business organization that has only one owner, financial liability any business obligation is a personal obligation, unlimited liability unrestricted legal responsibility for obligations. Judgements against owner will be kept indefinitely unless he declares bankruptcy. Limited access to capital based on their own credit risk, own assets, etc: taxation profits/loss reported o(cid:374) o(cid:449)(cid:374)er"s perso(cid:374)al i(cid:374)(cid:272)o(cid:373)e ta(cid:454) retur(cid:374), transferability (cid:272)a(cid:374)"t (cid:271)e tra(cid:374)sferred/sold to a(cid:374)other (cid:272)ause there"s (cid:374)o legal status. But assets are tra(cid:374)sferable: regulations legal requirements are minimal so its inexpensive. Specialized services must be licensed in that skill. Owner who wishes to use a name different from their own must register it so their identity is available to public.