Posts Tagged ‘Partnership’

Chapter Summary

Friday, September 3rd, 2010


The sole proprietorship and the partnership have the advantages of being easy to form, and of providing strong motivation and a high degree of independence. Disadvantages include lack of access to financing, lack of managerial expertise, the unlimited personal liability of the owner(s) and higher tax rates once the income of the business exceeds a certain amount. An added disadvantage of the partnership is the possibility of disagreements among the partners.

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New Terms

Tuesday, August 31st, 2010


Sole Proprietorship - A business firm owned (and usually managed) by a single person who bears full legal liability for the firms debts.

Partnership – A business firm owned by two or more persons, with each person bearing full legal liability for the firm’s debts.

Corporation – A business firm which is a separate legal entity from its owners, or shareholders, each of whose liability is limited to the amount of his or her investment in the firm.

Conglomerate – A group of seemingly unrelated types of corporations controlled in varying degrees by a central management group, through “holding companies” which own shares in those corporations.

Crown Corporation – A corporation owned by a government, being ultimately responsible, through a cabinet minister, to that government.

Proxy – A legal instrument whereby a shareholder’s right to vote at shareholder’s meetings is delegated to another person, either with or without specific instructions as to how that vote will be exercised.

Board of Directors – A group of people elected by the shareholders of a corporation to provide direction to the management of the corporation.

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