Forms of Ownership

Forms of Ownership - FormsofOwnership

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Forms of Ownership September 18, 2008 Sole Proprietorships, Partnerships, and Corporations Sole Proprietorship when management and ownership of a business are one and the same the oldest and most common form of legal ownership in Canada (60-70%) survival of the fittest Sole Proprietorship – Advantages easy to form/ dissolve; must be legal license may be required;  simplicity government assumes we’re stupid and protects us government preferential treatments tax preferential treatment – not double taxed sole claim on all profits (losses) personal incentive/ satisfaction pays only personal income tax secrecy – beating out the competition Sole Proprietorship – Disadvantages unlimited liability lack of continuity (uncertainty of duration) difficulty in raising monies management limitations highest bankruptcy rate (80%) (invoice reduces taxable income)
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(taxable income of more than 50% incorporate) Partnership when two or more people combine their financial, managerial, and technical abilities to operate a business for profit Types of Partnerships 1) General Partnerships All partners have unlimited, or general, liability 2) Limited Partnerships one general partner (by law) one or more limited partners September 23, 2008 Articles of Partnership prevents misunderstanding and ill-will at some future date not legally required in Canada Partnership Advantages easy to form owners are taxed at personal rate larger availability of money diversification of management skills retention of valuable employees personal interest/ satisfaction Partnership Disadvantages
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usually, unlimited liability (joint and several liability) management difficulties
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Forms of Ownership - FormsofOwnership

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