MGTA01H3 Chapter 4: Chapter 4 Notes
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MGTA01H3 Full Course Notes
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Chapter 4 understanding legal forms of business organization notes sole proprietorship a business owned and operated by one person legally, a business set up as a sole proprietorship is not considered a separate legal entity. N disadvantages include: unlimited liability; lack of continuity; transferring of ownership; provides little or no guidance in resolving conflict between the partners. N mergers the union of two companies to form a single new business. Summary of learning objectives: describe four forms of legal organization for a business and discuss the advantages and disadvantages of each. A sole proprietorship is a business owned and operated by one person. Answering only to themselves, sole proprietors enjoy considerable freedom in running the business. The ease of setting up a sole proprietorship makes it appealing to self-starters, as do the low start-up costs and the tax benefits. A sole proprietor is personally liable for all debts incurred by the business.
