KSB-100 Chapter Notes - Chapter 4: Gie, Unsecured Debt, Limited Liability
Document Summary
Sole proprietorship is a business owned by only one person. Unlimited liability is the legal condition under which an owner of investor is personally liable for all debts of a business. Easy and inexpensive to form; few governmental regulations. Get all the profits earned by the business. Do(cid:374)"t ha(cid:448)e to pa(cid:455) a(cid:374)(cid:455) spe(cid:272)ial i(cid:374)(cid:272)o(cid:373)e ta(cid:454)es. Have to supply all the different talents needed to make the business a success. Have to rely on your own resources for financing. If the company incurs a debt or suffers a catastrophe, you are personally liable. A partnership is a business owned jointly by two or more people. The impact of disputes can be lessened if the partners have executed a well-designed a well-pla(cid:374)(cid:374)ed part(cid:374)ership agree(cid:373)e(cid:374)t that spe(cid:272)ifies e(cid:448)er(cid:455)o(cid:374)e"s rights a(cid:374)d respo(cid:374)si(cid:271)ilities. The agreement might provide such details as the following: Amount of cash and other contributions to be made by each partner.
