LAW 122 Lecture Notes - Lecture 3: Limited Liability Partnership, Sole Proprietorship, Limited Liability
27 Nov 2017
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Disadvantages: unlimited personal liability-worst and ease liability is easy, money raised only by personal borrowing-throw debt for financing from the bank with interest rate, both problems grow as business grows. Partnerships (this will not be on the mid term but just understand about it) Three main types of partnerships: part(cid:374)ership (cid:894)so(cid:373)eti(cid:373)es (cid:272)alled (cid:862)ge(cid:374)eral part(cid:374)ership(cid:863)(cid:895) li(cid:373)ited lia(cid:271)ility part(cid:374)ership (cid:894)or (cid:862)llp(cid:863)(cid:895) limited partnership. Risks of unintended partnership: examine any proposed relationship carefully to determine if it is a partnership. Insist contract states relationship is not a partnership: restructure relationship if it conforms to partnership definition. Insist upon compensation for risk of partnership: seek advice from a lawyer. Income to partnership is personal income to partners: ontario partnership act, provides default rules, which can be supplemented or modified by partnership agreement, each partner can commit the partnership to obligations. Jointly and severable liability (both partners are responsible)
