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Chapter 7 - Forms of Carrying On A Business - Blank Form

This document summarizes different forms of business entities under law: 1) A sole proprietorship is a business owned and operated by one individual, with no legal separation between the owner and business. The owner has unlimited liability and pays personal income tax on profits. 2) A general partnership involves two or more individuals operating an unincorporated business together, with equal responsibility and decision-making power. Partners have unlimited liability. 3) Limited partnerships require at least one general partner who manages the business, and one limited partner who provides capital but does not participate in management. Limited partners have limited liability.

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70 views4 pages

Chapter 7 - Forms of Carrying On A Business - Blank Form

This document summarizes different forms of business entities under law: 1) A sole proprietorship is a business owned and operated by one individual, with no legal separation between the owner and business. The owner has unlimited liability and pays personal income tax on profits. 2) A general partnership involves two or more individuals operating an unincorporated business together, with equal responsibility and decision-making power. Partners have unlimited liability. 3) Limited partnerships require at least one general partner who manages the business, and one limited partner who provides capital but does not participate in management. Limited partners have limited liability.

Uploaded by

Golden retriever
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Professor Dyanoosh Youssefi BLAW150 Chapter 7: Forms of Carrying on a Business

Sole Proprietorship Partnership- General Partnership-Limited Partnership-Limited Liability


Def- method of One person owns and Two or more persons operate Two or more persons own a business, Partners in a limited liability
carrying on operates the business, with and own a business that is not with at least one being a general relationship- in certain professions
business no legal separation registered with the government partner, and one being a limited only (accountants, lawyers)
between the owner and the as a limited liability or limited partner. Lt’d partner provides
business partnership, with no separation $/property (not services), but does not
between the owners and the participate in business affairs,
business operations, decision-making; shares
profit
Key features/ A general partnership, like other
Legal kind of partnerships, is not an
Characteristics A sole proprietorship has independent legal entity. It
no legal existence apart cannot, therefore, enter into
from its owner. It is legally binding contracts or
therefore cannot, on its protect its owners from legal
own, sue another individual liabilities for injuries (physical or
or business, nor can it be financial) caused by the firm.
sued on its own.

Relevant Law

Creation/ A sole proprietorship is It is created when two or more


Name created as soon as individuals come together to run
Registration someone opens a business an unincorporated business. The
that interacts with public. If name of a general partnership is
he/she wishes to use a often simply the combined
name for her business names of the individual
other than her own name, partners.
he/she must register that
name under the Business
Names Act in Ontario (or
similar legislation in other
provinces.)
Conducting In most cases, sole In this, all partners are equal
business/ proprietorships are small (subject, of course, to the terms
operations businesses with few or no of any partnership agreement).

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employees. They usually Each partner has equal power

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operate from a single and equal responsibility.
location and offer a limited Depending on the size of the
Professor Dyanoosh Youssefi BLAW150 Chapter 7: Forms of Carrying on a Business

number of products or partnership-some can become


services. Many Internet- huge enterprises-decisions
based business are sole about the day-to-day operations
proprietorships. Also, A of the firm may be made by all
sole proprietor runs their the partners or by a small group
business on their own or of partners specifically chosen
with the help of friends or to make these decisions.
family members who may
or may not be formally
paid.
Complexity,
cost

Tax The Canada Revenue


implications Agency treats a sole
proprietorship as a source
of income for its owner.
Any profit (income minus
legitimate expenses) the
business earns is added to
any of owner’s other
income. Also, business
losses can be set off against
her income from other
sources in order to reduce
tax.

Liability

The main disadvantage of


choosing to operate a
business as a sole
proprietorship is the legal
liability of the owner.
Because owner and

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business are one in the

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eyes of the law.
Professor Dyanoosh Youssefi BLAW150 Chapter 7: Forms of Carrying on a Business

Corporation-Private Corporation- Public Co-operative


Def- method of A legal entity that is distinct from its A legal entity that is distinct from its A legal entity owned by members, who may
carrying on creators and owners, has the rights of an creators and owners, has the rights of an be people who use the co-op services and/or
business individual (a “person”) individual (a “person”)- Some or all shares work there, primary focus on some shared
Shares are privately-owned are issued for public sale objective or value

Key features/
Legal
Characteristics

Relevant Law

Creation/ Name
registration

Conducting
business

Complexity,
cost

Tax
implications

Liability

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Professor Dyanoosh Youssefi BLAW150 Chapter 7: Forms of Carrying on a Business

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