Textbook Notes (369,160)
Canada (162,427)
York University (12,903)
ADMS 2610 (94)
Chapter 16

Chapter 16.docx

5 Pages
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Department
Administrative Studies
Course Code
ADMS 2610
Professor
William Pomerantz

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Chapter 16Law of Sole Proprietorship and Partnership Pages 286300Forms of Business OrganizationBusiness begins with identifying a need for a productservice and then proceed to satisfy need o Carry out particular project or venture o Grows as large entity when entrepreneur accurately assesses market o Business may begin as sole proprietorship expand to partnership or develop into corporationCorporations may be formed initially if carry out large business activities need large amount of capital Sole ProprietorshipSole proprietorship a business where the sole owner is responsible for the management and the debts of the business o Simplest form of business organizationOwner owns all assets entitled to all profits and responsible for all debts o Makes all decisions in operation responsible for success or failureDisadvantages limited ability to raise capital skill limitations of proprietorMust register or license business can be done online in most jurisdictionsProfessional services must be licensed to practice skill with governing legislation before they can carry out professional practice o Eg medicine dentistry law architecture are governed provincially o Semiprofessional and skilled trade activities are also subject to licensingMunicipalities often impose own registration in effort to protect or control activity o Eg operation of taxis serviceoriented businessesAdvantages freedom for individual flexibility of operation decisions are made quicklyPartnershipsIncrease in number of proprietors to two or more offers additional management expertise additional capital o Financial institutions are more willing to extend credit to partnership with more assetscollateralPartners possess greater interest in success of business than employees o Increase chances of growth and developmentEach partner is individually responsible for carelessness or poor judgement of each other partnerHistorical Development of PartnershipPartnership a legal relationship between two or more persons for the purpose of carrying on a business with a view to profit o Exclude social clubs charitable organizations amateur sports groups debtorcreditor relationship joint ownership of propertyHistorically merchants banded together for mutual protection from thieves and joined together in sharing and shared fortunes of ventures th By late 18 century courts examined partnership in light of contract law o Expansion of trade increased use of partnershipsIn 1879 Sir Frederick Pollock drafted bill to codify law of partnership in England o Reflected Common law and rules of equity o Adopted in Canada with minor modificationsPartnership act allows formation of partnerships for all commercial enterprises o Exception corporation form for banking and insurance partnerships is required o Must consist of at least two personsFinal development is limited liability partnership LLP o Hybrid of corporation and partnershipNature of Partnership
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