LAW 122 Lecture Notes - Lecture 6: Limited Liability Partnership, Sole Proprietorship, Fiduciary
12 Oct 2016
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Chapter 21 basic forms of busin ess organizations. Types of business organizations: sole proprietorships, general partnerships, limited partnerships, corporations. Liability and benefits of entrepreneurs and other stakeholders differ depending on type used. Definition: exists when a person carries on business on their own, without adopting any other from of business organization. There is no separation between business and proprietor (owner) Liable for all obligations vicariously liable for all torts committed by employees (chap. 3) Business income(loss) on personal income tax purposes. Proprietor cannot be employee of business cannot be in contract with yourself. Unlimited personal liability = third parties may take all the sole proprietor"s personal assets to satisfy the business"s obligations. Financing money can only be raised by personal borrowing. Being sued/ held liable = all yours (owner) Conclusion: sole proprietorship is suitable for small businesses. Three main types of partnerships: partnership (general partnerships) (pg. Holding each other out as partners or acquiescing.
