Lecture_Two_-_Partnerships_Proprietorships_and_Trusts

Lecture_Two_-_Partnerships_Proprietorships_and_Trusts -...

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Partnerships, Proprietorships and Trusts
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Introductory Notes • All commercial activity takes place in some form • There are different ways that commercial activity may be organized, and different rules for it depending on form • These rules address certain key questions – Who owns the equity in the business? – Who is entitled to make management decisions? – Who is liable for the activities of the business? • Debts and commercial liabilities • Civil and criminal liability • We’ll be covering corporations in the next two classes
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Sole Proprietorship • Any individual carrying on business • Simple and direct • Practical limits to size and growth • Note any special licensing requirements or regulations • Often a starting place for bigger things
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Partnership “Partnership is the relation that subsists between persons carrying on a business in common with a view to profit, but the relation between the members of a company or association that is incorporated by or under the authority of any special or general Act in force in Ontario or elsewhere, or registered as a corporation under any such Act, is not a partnership within the meaning of this Act.” - Partnership Act , s. 2, R.S.O., 1990
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Partnership • It’s a relationship • Between persons (two or more) • Carrying on a business in common • With a view to profit • Not otherwise incorporated
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Partnership: Important Characteristics • Partnership is based on the real relationship between parties, and need not be written • Partnership is a personal relationship, founded on mutual trust • Includes agency on behalf of other partners • Extends beyond shared interests in real property • Governed specially by the Partnership Act
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Partnership: Relationships that Aren’t • Common ownership or tenancy – Shared ownership of land or property does not
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Lecture_Two_-_Partnerships_Proprietorships_and_Trusts -...

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