MGTA05H3 Chapter Notes - Chapter B: Cash Flow, Corporate Bond, Aktiengesellschaft

• School: UTSC
• Department: Management (MGT)
• Course: MGTA05H3
• Professor: Murphy Lawrence

Document Summary

Mgta05 section b: legal and financial background for business: Sole proprietorship a business owned and operated by one person. Legally, your business is considered to be an extension of yourself (not a separate legal entity) Accounts for only a small proportion of total business revenues. Freedom answers to no one but themselves; don"t share ownership. Easy and simple legal set up to form low start-up costs. Operate business under your own name (with no additions), don"t need to register your business to start operating. Tax benefits losses can be deducted from income the proprietor earns from personal sources other than the business. Unlimited liability a sole proprietor is personally liable for all debts and legal liabilities incurred by the business: business fails to generate cash, bills must be paid out of the owner"s pocket. Lack of continuity legally dissolves when the owner dies. Depends on resources of one person whose managerial and financial limitations may constrain the business.