Textbook Notes (368,844)
Canada (162,200)
MGTA01H3 (583)
Chapter 4

Chapter 4

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Management (MGT)
Chris Bovaird

Chapter 4 Understanding Legal forms of Business OrientationSole Proprietorshipa business owned and operated by one personAdvantages of a Sole Proprietorshipfreedom is considered to be the most important benefit of a sole proprietorship Sole proprietors answer to no one but themselves since they dont share ownershipit is also easy to formtax benefits are another attractive feature since the business and the proprietor are legally one and the sameDisadvantages of a Sole Proprietorshipunlimited liability is personal liability for all debts of the businessespersonally liable responsible for all debts incurred by the businessif the business fails to generates enough cash bills must be paid out of the owners pockets another disadvantage is lack of continuity since the business legally dissolves if the owner diesit is also dependent on the resources of one person whose managerial and financial limitations may constrain the businessit is also harder to borrow money to start up or expand as bankers fear that they might not be able to recover the moneyPartnershipa form of organization established when two or more persons agree to combine their financial man
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