MGTA01H3 Chapter Notes - Chapter 4: General Partnership

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Introduction to Management Chapter 4
Canada is a free market economy; therefore entrepreneurs need no permission, pay no fees,
and need not to fill out any special forms to start a business. They just simply begin.
3 Main forms of Organization
In Canada 3 common forms:
Sole Proprietorship
Partnership
Corporation
Sole Proprietorship
Easiest way to form a business
Most Common form of ownership
Example: Local math tutor, kid who shovels drive ways, private swimming teacher.
In a sole proprietorship the business is owned and operated by 1 person.
Sole proprietor:
-makes all decisions
-keeps all profits
-responsible for all debts
Advantages: Easy to setup, with no regulatory requirements, no mandatory accounting
needs. Cheap to set up ($60 - $70 if registered/ $0 if not), Does not need to be registered,
and management and ownership clear.
Disadvantages: limits to owners skills, limits to owners resources, hard to get finance
(bank loans).
Personal Liability: you are personally responsible to pay any bills, settle any lawsuits,
and pick up all the pieces.
Unlimited Liability: your personal responsibility is unlimited; you can be unlimitedly
sued if anything goes wrong. No limit to the value of the job. No limit to the value of the
assets used on the job.
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Document Summary

Canada is a free market economy; therefore entrepreneurs need no permission, pay no fees, and need not to fill out any special forms to start a business. In canada 3 common forms: sole proprietorship, partnership, corporation. Example: local math tutor, kid who shovels drive ways, private swimming teacher. In a sole proprietorship the business is owned and operated by 1 person. Advantages: easy to setup, with no regulatory requirements, no mandatory accounting needs. Cheap to set up ( - if registered/ sh if not), does not need to be registered, and management and ownership clear. Disadvantages: limits to owner"s skills, limits to owner"s resources, hard to get finance (bank loans). Personal liability: you are personally responsible to pay any bills, settle any lawsuits, and pick up all the pieces. Unlimited liability: your personal responsibility is unlimited; you can be unlimitedly sued if anything goes wrong. No limit to the value of the job.

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