LAW 122 Lecture Notes - Lecture 6: Limited Liability Partnership, Sole Proprietorship, Limited Partnership
Document Summary
When a person carries on business on their own, without adapting any other form of business organization. Types of business organizations: sole proprietorships, general partnerships, limited partnerships, corporations. Liability and benefits of entrepreneurs and others stakeholders differ depending on type used. Why is business organization important: stakeholders, employees, civil society (labor, environment, product liability, basic reason: to be efficient. Arises once person begins to conduct business o. Example: start cutting someone"s lawn for money ( or start selling groceries from. No separation between business and proprietor (owner) your truck: proprietor entitled to all income, proprietor liable for all obligations, proprietor"s assets available for business debts. Unlimited personal liability: business income (loss) on personal income, proprietor cannot be employee of business. Disadvantages: simple to start, simple to administer, tax, unlimited personal liability, money raised only by personal borrowing, both problems grow as business grows, suitable for small businesses. No formal registration as a sole proprietorship .
