Textbook Notes (368,856)
Canada (162,212)
MGTA01H3 (583)
H Laurence (25)
Chapter 4

Chapter 4-The Sole Proprietorship.doc

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Department
Management (MGT)
Course
MGTA01H3
Professor
H Laurence
Semester
Fall

Description
Chapter 4 Legal Forms of Business OrganizationThe Sole ProprietorshipSole Proprietorship is a business owned and operated by one personnot a separate legal entityadvantagesofreedomanswer to no one but themselvesoeasy to formotax benefitssince business and proprietor are legally one these losses can be deducted from income the proprietor earns from personal sources other than businessdisadvantagesounlimited liability personal liability for all debts of businessoif owner doesnt make enough money bills have to be paid out of his pocketolack of continuityit dies when the owner diesofind it hard to borrow money cuz banks afraid they wont get money backoit depends on one persons managerial skillsPartnershipPartnership a form of organization established when two or more persons agree to combine their financial managerial and technical abilities for the purpose of operating a business for profittwo types general partnership and limited partnershipGeneral Partnership a type of partnership in which all partners are jointly liable for the obligations of the businessLimited Partnership a type of partnership with at least one general partner who has unlimited liability and or more limited partnersThe limited partners cannot participate in the daytoday management of the business or they risk the loss of their limited liability statusLimited partner partners who dont participate actively in the business and whose liability is limited to the amount they invested in the partnershipGeneral partner partners who are actively involved in managing the firm and have unlimited liabi
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