Textbook Notes (363,007)
Canada (158,140)
MGTA01H3 (583)
Chapter 4

Chapter 4

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University of Toronto Scarborough
Management (MGT)
Chris Bovaird

Chapter 4 Understanding Legal Forms of Business Organization ORGANIZING OPTIONS (FORMS OF BUSINESS OWNERSHIP) - Four options are available: the sole proprietorship, the partnership, the corporation, and the cooperative. The Sole Proprietorship - The sole proprietorship is a business owned and operated by one person. - Majority of businesses in Canada are sole proprietorships yet this form of ownership accounts for only a small portion of total business revenues. Advantages - Freedom - Easy to form - The simplicity of legal setup procedures - Tax benefits the losses can be deducted from income the proprietor earns from personal source other than the business. Disadvantages - Unlimited liability personal liability for all debts of the business. - Lack of continuity the business legally dissolves when the owner dies - Hard to borrow money to start up or expand The Partnership - A partnership is formed when two or more persons operate a business for profit. - General partnership is a type of partnership in which all partners are jointly liable for the obligations of the busines
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