Week 7 Chapter 16 – Law of Sole Proprietorship and Partnership Sole Proprietorship A business where the sole owner is responsible for the management, debts and liabilities of the business Simplest form of business Unlimited personal liability Limited ability to raise capital May require registration or license Partnership A legal relationship between two or more parties for the purpose of carrying on a business with a view to a profit. Does not include organizations not in business for profit – charities, social clubs, sports groups Historical Development Originally common law Today mix of common law and statute Most recent development is the “limited liability partnership” or LLP Nature of a Partnership Sharing of profits Contribution of capital Active participation in management Part ownership or co-ownership not necessarily a partnership Distinguish (Partnership vs. Co-ownership) Partnership Contractual Founded on mutual trust Partner agent of other partners and the partnership Partners share in partnership property is always personality (personal not real property) Subject to Partnership Act Co-ownership Arises in several ways Freely alienable without consent of other co-owner Not an agent of other co-owners
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- Spring '10
- Corporation, partner, Limited liability partnership, Sole Proprietorship and Partnership