Management and Organizational Studies 2275A/B Chapter Notes - Chapter 14: Law Of Agency, Franchising, Limited Liability

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 2275A/B
• Professor: Philip King

Document Summary

Forms of business organization: choosing how to own a business is a critical decision because it determines in large part. Business forms and arrangements who: is nancially liable for the business, shares in business pro ts and other assets, makes and is accountable for management decisions. The sole proprietorship: pro t sharing: all the pro ts after taxes go to the sole proprietor alone. The sole proprietorship: sources of capital: limited access to capital, since the proprietor has no business partners, he is limited to his own assets and whatever credit he can draw on to nance the operation. !2: this may be favourable or unfavourable depending on the taxpayer"s circumstance, including whether the owner"s marginal tax rate is higher or lower than the applicable corporate tax rate. The sole proprietorship: transferability: cannot be transferred or sold to another because it has no legal status.