ADMS 2610 Lecture Notes - Lecture 6: Limited Liability

• School: York University
• Department: Administrative Studies
• Course: ADMS 2610
• Professor: Jill Prindiville

Document Summary

Easy to get started, requires little cash, permits a high degree of flexibility. Owners has total control and takes all profits. There is no legal entity between the person and the business, which can lead to huge tax advantages. You can deduct business expenses from other sources of revenue. If you run the business from home, you can deduct a portion (generally 10%) of you home expenses such as telephone, hydro, mortgage and insurance from taxes. And it is frequently difficult to raise capital without outing your house up for collateral. You can protect this home by placing it in your partner"s name and buy insurance to cover most eventualities (a tax-deductible expense). Partners have an obligation strict liability to 3rd parties injured by the partnership, including its employees. Partners have joint, or more commonly, joint and several liabilities. General partners can limit their personal liability by putting their homes in spouse"s name and/or purchasing appropriate insurance.