MGTA01H3 Chapter 4: Notes for Chapter 4 of Business, Vol. 1, 2e
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MGTA01H3 Full Course Notes
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Document Summary
Mgta03 business, volume 1: griffin, r. ebert, f. starke. Chapter 4 understanding legal forms of business organization. Sole proprietorship: a business owned and operated by one person; the business is considered an extension of the sole proprietor, not a separate legal entity. Partnership: formed when two or more people operate a business for profit; owners pool their resources for its success; not regarded as legal entities; partners are taxed as individuals. General partnership: all partners are jointly liable for the obligations of the business; share in the profits, have a say in managing the business, responsible for debt. Corporation: artificial being ; separate legal entity that is liable for own debts, owners" liability is limited to their investment. Characteristics: legal status as separate entity, property rights and obligations, indefinite lifespan; ensure business runs in best interest of shareholders. Shareholders: investors who buy shares of a corporation; real owners of a corporation.
