Textbook Notes (363,065)
Canada (158,171)
MGTA01H3 (583)
Chapter 4

BUSINESS CUSTOM 2/E VOL. 1 Chapter 4 Readings (very detailed and helpful)

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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) The sole proprietorship: A business owned and operated by one person Advantages of sole proprietorship: Freedom since there is no sharing of ownership Easy to form Tax benefits (tax cuts from income made from personal sources rather than the business) Disadvantages of a sole proprietorship: Unlimited liability: personal liability for all debts of the business o If biz fails to generate enough cash, bill must be paid out of owners pocket Lack of continuity: a sole proprietorship legally dissolves when owner dies Biz depends on the resources of one person who managerial and financial limitations may constrain biz o Hard to borrow money to start-up or expand The Partnership: A form of organization established when two or more persons agree to combine their financial, managerial, and technical abilities for the purpose of operation a business for profit Two types of partnership: o General partnership: a type of partnership in which all partners are jointly liable for the obligations of the businessall partners share in the profits of the business and have a say in managing the business o Limited partnership: a type of partnership with at least one general partner (who has unlimited liability) and one or more limited partners. The limited partners cannot participate in the day-to-day management of the business or they risk loss of their limited liability status www.notesolution.com
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