COMMERCE 1E03 Lecture Notes - Lecture 6: Limited Liability Partnership, Limited Liability, Sole Proprietorship
10 Apr 2016
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Sole proprietorship: a business owned, and usually managed, by one person. Unlimited liability: the responsibility for business owners for all the debts of a business. Partnership: a legal form of business with two or more parties. Pros: more financial resources, shared management and pooled/complementary skills and knowledge, longer survival, shared risk, no special taxes [taxed as the personal income of the owners, less regulation. Cons: unlimited liability, division of profits, disagreements among partners, difficulty of termination, possibly higher taxes [may be paying her taxes since it is very pro table] Limited partner: an owner who invests money in the business but does not have any management responsibility, or liability beyond their investment. General partner: an owner(partner) who has unlimited liability and is active in managing the firm. [every partnership must have at least one general partner] Limited liability: the responsibility of the business"s owners for losses only up to the amount they invest; limited partners and shareholders have limited liability.
