This document discusses three main types of business entities - sole proprietorships, partnerships, and corporations. It provides information on how each is formed, owned, and dissolved. Sole proprietorships are owned and run by one individual, while partnerships have two or more owners and can take several forms with different liability implications. Corporations are more complex to establish but provide ownership shares to members and are legally separate entities from their owners.

1. METHODS OF
CARRYING ON A
BUSINESS
THREE MAIN TYPES OF BUSINESS
SOLE PROPRIETORSHIP
PARTNERSHIP
CORPORATION
WINTER SEMESTER, 2022

2. APPROACH TO LEARNING
• FORMATION: EASY/COMPLEX
• DAY TO DAY RUNNING TO THE BUSINESS
• RESPONSIBILITIES AND DUTIES
• OWNERSHIP
• DISSOLUTION

3. SOLE
PROPREITORS
HIP
• SOLE INDIVIDUAL RUNNING A BUSINESS –
what are the advantages and disadvantages?
• MAY HAVE EMPLOYEES – what are the
possible implications for owner?
• EASY TO SET UP – why is the case?

4. PARTNERSHIPS
• THREE TYPES
• GENERAL PARTNERSHIP – how is
defined/identified? (next slide)
• LIMITED PARTNERSHIP – how is are they
distinguished from G.P? (slide 5)
• LIMITED LIABILITY PARTNERSHIP – who do
they differ from the 2 above? (slide 6)

5. GENERAL
PARTNERSHIP
• 2 OR MORE PEOPLE CARRYING ON A
BUSINESS IN COMMON WITH A VIEW TO
MAKING A PROFIT
• NO INTENTION IS REQUIRED, JUST NEED TO
BE FUNCTIONING AS SUCH
• THEREFORE, VERY EASY TO SET UP.
• LIABILITY AND RESPONSIBILITIES ARE
SHARED

6. LIMITED
PARTNERSHIP
• AT LEAST ONE PARTNER WILL HAVE
INVESTED IN THE BUSINESS BUT NOT
INVOLVED IN THE RUNNING OF IT.
• THEY ARE HOWEVER LIABLE FOR DEBTS TO
THE VALUE OF THEIR INVESTMENT.

7. LIMITED
LIABILITY
PARTNERSHIP
• PROFESSIONALS PROVIDING A SERVICE
LIKELY TO FORM THIS TYPE OF PARTNERSHIP:
ACCOUNTANTS, LAWYERS, SURVEYORS
• PERSONAL ASSETS ARE PROTECTED BUT
NOTE NEGLIGENCE.
• TIME CONSUMING AND EXPENSIVE TO SET
UP

8. CORPORATION
• PRIVATE V PUBLIC
• UNLIMITED
• COMPLEX TO SET UP
• CORPORATIONS ARE SEPARATE LEGAL
ENTITIES FROM THEIR MEMBERS

9. CORPORATIONS ARE ARTIFICIAL PERSONS
• They can sue and be sued.
• As a separate legal entity the corporation would be liable for the
debts of the business and not its members

10. OWNERSHIP?
• SP
• PARTNERSHIPS
• CORPORATIONS

11. RUNNING
THE
BUSINESS
• SP
• PARTNERSHIPS
• CORPORATIONS

12. CLAUSES IN A
PARTNERSHIP
AGREEMENT
• SHARING PROFITS AND LOSSES –why?
• MANAGEMENT & DECISION MAKING – why?
• NEW PARTNERS –why?
• REMUNERATION – why?

13. CLAUSES CONTINUED
• INDEMINITY – why?
• EXPULSION – why?
• DISSOLUTION – why?

14. DIRECTORS AND PARTNERS
• What are director’s duties and responsibilities?
• When might there be a conflict of interest for directors?
• Is a director entitled to make a secret profit?
(Fiduciary term).

15. Partners
• What are the duties and responsibilities of
partners?
• Are partners agents?
• What are the main advantages and
disadvantages of a partnership?

16. TYPES OF
SHARES
• What are the main types of shares that a
shareholder can own?
Preferred Shareholder term
• How do they differ?