Textbook Notes (362,755)
Canada (158,052)
MGTA01H3 (583)
H Laurence (25)
Chapter 4

Chapter 4 Study Guide

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University of Toronto Scarborough
Management (MGT)
H Laurence

1 Chapter 4: Understanding Legal Forms of Business Organization ORGANIZING OPTIONS (FORMS OF BUSINESS OWNERSHIP) The Sole Proprietorship Sole Proprietorship: a business owned and operated by one person. Legally, if you set up a business as a sole proprietorship, your business is considered to be an extension of yourself (and not a separate legal entity). Advantages: Freedom is the most important benefit of a sole proprietorship. Sole proprietorships answer to no one but themselves since they dont share ownership and its easy to form. If you operate the business under your own name you dont even need to register your business name to go into business (you can just put a sign outside the door and the business has officially started). Disadvantages: a major drawback is unlimited liability (personal liability for all debts of the business). Partnership: 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 profit. www.notesolution.com
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