Comm 304 business Law Lecture 4.docx

Comm 304 business Law Lecture 4.docx - Comm 304 Business...

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Comm 304: Business Law (1) Sole Proprietorship One person owns the entirety of the business (simplest form). Under your own name (ex. John Brown shoe repair don’t have to register your Business) Under something else (ex. Ace construction/enterprises) you have to register your business (merely descriptive names) This person may have many employees, may share in profits (pay bonuses) This person is entitled to all the profits and liable for all the losses (expenses) (suffer losses) Simplest form of carrying out a business. Advantage- entitled to all the profits Disadvantage- strictly on your own, personally liable, must pay all debts individually, difficult to raise capital (only one person to provide forms of security) Responsible for all contracts Responsible for all torts (form of negligence and wrongdoing) One person makes all the decisions and thus is solely responsible When the proprietor dies, so does the business Has to be registered under a Provincial Statute; Business Names Registration Act Usually a very small business (2) Partnership not a principal of law but a common saying: “A partnership is a dangerous ship to sail in” Governed by provincial legislation – Partnership Act Definition: Two or more persons (individual) carry on a business (relationship) in common with a view of sharing of profits and losses Defined as the relation that subsists between persons carrying on a business with a view of sharing profits and losses The term “firm” strictly used for partnership, (not either of the other 2) Called a firm (AB, CD, and EF carry on a business under the firm name and style of Ace Engineers and Company) Descriptive names (e.g Ace Engineers) have no legal status (not legal entity —means nothing legally ) In order to be a legal entity title of business must end in; corporation, company limited, Co. Ltd, Inc Jones Brown company carrying on business under firm name & style of Ace & company or Ace & Associates or Ace & partners You wouldn’t sue “Ace & Associates, etc” you would have to sue the specific people A partnership has no legal status, it is the individual or corporaton that has the status. Only things that have legal status are individual names and corporations (individual & “corporate person”) The name of the business means nothing, it is just a descriptive name, the lawsuit will be against the individuals in the partnership – holding out, putting your name out there is enough to get you in trouble whether or not you are actually a partner Contract would be with individuals * 4 persons in partnership – Dangerous because in partnership there is Joint and Several Liability ( joint means everyone is liable, several means person who was wrongfully done by can go after one, two etc or all of the partners) 1
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Comm 304: Business Law If one partner gets in an accident with company car while working, all are liable, they are all agents of one another
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