Podcast
Questions and Answers
What is the primary responsibility of a sole proprietor like Uncle Izzy?
What is the primary responsibility of a sole proprietor like Uncle Izzy?
- To establish a corporate structure for the business
- To share profits equally with partners
- To limit personal liability for business debts
- To register a business name if different from their own (correct)
Which of the following is NOT a common form of business structure mentioned?
Which of the following is NOT a common form of business structure mentioned?
- Partnership
- Sole Proprietorship
- Limited Liability Company (correct)
- Corporation
What might influence Zuri, Namid, and Mitchell's choice of business form?
What might influence Zuri, Namid, and Mitchell's choice of business form?
- The number of customers they expect
- The degree of financial risk they are willing to take (correct)
- The marketing strategies they plan to use
- The involvement of foreign investors
What is a potential disadvantage of a sole proprietorship?
What is a potential disadvantage of a sole proprietorship?
Which factor is specifically highlighted as affecting the choice of business form at different stages of development?
Which factor is specifically highlighted as affecting the choice of business form at different stages of development?
What is one legal implication of Uncle Izzy's business as a sole proprietor?
What is one legal implication of Uncle Izzy's business as a sole proprietor?
What aspect of business forms does Canadian law primarily govern?
What aspect of business forms does Canadian law primarily govern?
What unique considerations may Indigenous businesses need to take into account when choosing a business form?
What unique considerations may Indigenous businesses need to take into account when choosing a business form?
What was the unintended outcome of the winding up of Best Beaver?
What was the unintended outcome of the winding up of Best Beaver?
In what situation can parties other than minority shareholders use the oppression remedy?
In what situation can parties other than minority shareholders use the oppression remedy?
What can shareholders who control a corporation be liable for?
What can shareholders who control a corporation be liable for?
What does not limit the liability protection enjoyed by shareholders?
What does not limit the liability protection enjoyed by shareholders?
What are appraisal rights particularly useful for?
What are appraisal rights particularly useful for?
What is a significant advantage of creating a partnership agreement?
What is a significant advantage of creating a partnership agreement?
How does profit participation differ between a sole proprietorship and a general partnership?
How does profit participation differ between a sole proprietorship and a general partnership?
What major disadvantage do partners in a general partnership face?
What major disadvantage do partners in a general partnership face?
What can help mitigate the risks associated with entering a partnership?
What can help mitigate the risks associated with entering a partnership?
What is one of the main financial benefits of forming a general partnership?
What is one of the main financial benefits of forming a general partnership?
How are partnership profits treated for tax purposes?
How are partnership profits treated for tax purposes?
What characteristic is typically associated with a general partnership?
What characteristic is typically associated with a general partnership?
Which statement about partner liability is true in a general partnership?
Which statement about partner liability is true in a general partnership?
What is an essential factor to consider when selecting partners for a partnership?
What is an essential factor to consider when selecting partners for a partnership?
What key benefit does the flexibility of a partnership structure provide?
What key benefit does the flexibility of a partnership structure provide?
What role does each partner's liability play in a general partnership?
What role does each partner's liability play in a general partnership?
Why is flexibility one of the key features of a general partnership?
Why is flexibility one of the key features of a general partnership?
Why might a business owner choose to operate as a general partnership instead of a sole proprietorship?
Why might a business owner choose to operate as a general partnership instead of a sole proprietorship?
What is true regarding the liability of partners in a limited liability partnership?
What is true regarding the liability of partners in a limited liability partnership?
What must a limited partnership include regarding its partners?
What must a limited partnership include regarding its partners?
What is one key purpose of a partnership agreement?
What is one key purpose of a partnership agreement?
Under what circumstances can a limited partner lose their limited liability status?
Under what circumstances can a limited partner lose their limited liability status?
What is a primary characteristic of a corporation?
What is a primary characteristic of a corporation?
Which of the following statements about general partnerships is correct?
Which of the following statements about general partnerships is correct?
What aspect is typically covered in a partnership agreement?
What aspect is typically covered in a partnership agreement?
What type of partnership requires a formal agreement to operate?
What type of partnership requires a formal agreement to operate?
What is the consequence of relying solely on government acts for partnership operations?
What is the consequence of relying solely on government acts for partnership operations?
In a limited partnership, who is responsible for managing the business?
In a limited partnership, who is responsible for managing the business?
Which of the following is NOT a characteristic of a limited liability partnership?
Which of the following is NOT a characteristic of a limited liability partnership?
What does a partnership agreement usually address?
What does a partnership agreement usually address?
What is a limitation partners face when forming a general partnership?
What is a limitation partners face when forming a general partnership?
What makes a corporation distinct from a partnership?
What makes a corporation distinct from a partnership?
What document represents the ownership of shares in a corporation?
What document represents the ownership of shares in a corporation?
What does federal incorporation provide to a corporation?
What does federal incorporation provide to a corporation?
Why might a corporation want to avoid using a name similar to an existing business?
Why might a corporation want to avoid using a name similar to an existing business?
What is a NUANS report?
What is a NUANS report?
Which legal characteristic is true about a corporation?
Which legal characteristic is true about a corporation?
What key principle was established in the case of Salomon v A Salomon & Co Ltd?
What key principle was established in the case of Salomon v A Salomon & Co Ltd?
What is one advantage of a corporation compared to a sole proprietorship?
What is one advantage of a corporation compared to a sole proprietorship?
Which of the following is NOT a function of a corporate seal?
Which of the following is NOT a function of a corporate seal?
What type of corporation is limited to rights in its province of incorporation?
What type of corporation is limited to rights in its province of incorporation?
What step should be taken before ordering a NUANS report?
What step should be taken before ordering a NUANS report?
Why is it common for businesses to use coined names?
Why is it common for businesses to use coined names?
Which is a key reason a corporation might want to expand to multiple provinces?
Which is a key reason a corporation might want to expand to multiple provinces?
What is the primary function of corporate minutes?
What is the primary function of corporate minutes?
Which of the following best describes the relationship between partners in a general partnership?
Which of the following best describes the relationship between partners in a general partnership?
In what situation can shareholders be personally liable for corporate debts?
In what situation can shareholders be personally liable for corporate debts?
What aspect does the choice of business form NOT influence?
What aspect does the choice of business form NOT influence?
Which type of corporation allows for both public and private shareholders?
Which type of corporation allows for both public and private shareholders?
What is a key advantage of establishing a corporation?
What is a key advantage of establishing a corporation?
What must be done in order to legally use a business name other than your own in Ontario?
What must be done in order to legally use a business name other than your own in Ontario?
In terms of liability, what differentiates a shareholder in a corporation from a sole proprietor?
In terms of liability, what differentiates a shareholder in a corporation from a sole proprietor?
What is the potential consequence for failing to register a business name?
What is the potential consequence for failing to register a business name?
What is one of the primary roles of agents in a business context?
What is one of the primary roles of agents in a business context?
What does a limited liability partnership primarily offer its partners?
What does a limited liability partnership primarily offer its partners?
Why is it important for customers to know the owner's name of a business?
Why is it important for customers to know the owner's name of a business?
Which of the following best describes a co-operative corporation?
Which of the following best describes a co-operative corporation?
How is a sole proprietorship legally recognized in relation to its owner?
How is a sole proprietorship legally recognized in relation to its owner?
What is a key difference between licensing and franchising?
What is a key difference between licensing and franchising?
What tax obligations does a sole proprietor face?
What tax obligations does a sole proprietor face?
What advantage does a sole proprietorship offer regarding business decisions?
What advantage does a sole proprietorship offer regarding business decisions?
Why is it important for a business person to understand legal alternatives for structuring their business?
Why is it important for a business person to understand legal alternatives for structuring their business?
What is a potential limitation of partnerships compared to sole proprietorships?
What is a potential limitation of partnerships compared to sole proprietorships?
What happens if a sole proprietor wants to change their business strategy?
What happens if a sole proprietor wants to change their business strategy?
How does a sole proprietor benefit from profits generated by the business?
How does a sole proprietor benefit from profits generated by the business?
How does forming a corporation assist in future planning for a business?
How does forming a corporation assist in future planning for a business?
Which of the following is NOT a typical characteristic of a sole proprietorship?
Which of the following is NOT a typical characteristic of a sole proprietorship?
What must a sole proprietor do to prevent others from using their business name?
What must a sole proprietor do to prevent others from using their business name?
Which of the following is a potential disadvantage of being a sole proprietor?
Which of the following is a potential disadvantage of being a sole proprietor?
What is a characteristic of a general partnership that differentiates it from a limited liability partnership?
What is a characteristic of a general partnership that differentiates it from a limited liability partnership?
How is the name of a general partnership typically formed?
How is the name of a general partnership typically formed?
What kind of business structure is most commonly associated with small businesses and few employees?
What kind of business structure is most commonly associated with small businesses and few employees?
What is a corporation primarily defined as?
What is a corporation primarily defined as?
What should a sole proprietor consider when hiring help from friends or family?
What should a sole proprietor consider when hiring help from friends or family?
What legal concept holds all partners responsible for a partnership's actions?
What legal concept holds all partners responsible for a partnership's actions?
Which type of corporation sells its shares to the public?
Which type of corporation sells its shares to the public?
Who are the incorporators of a corporation?
Who are the incorporators of a corporation?
What is a key factor determining if a sole proprietorship is the right choice for a business?
What is a key factor determining if a sole proprietorship is the right choice for a business?
In what scenario might individual partners of a general partnership be held accountable for each other's actions?
In what scenario might individual partners of a general partnership be held accountable for each other's actions?
What is one of the legal rights guaranteed to shareholders?
What is one of the legal rights guaranteed to shareholders?
How does the legal status of a sole proprietorship affect obligations in contracts?
How does the legal status of a sole proprietorship affect obligations in contracts?
What must partners in a general partnership do to protect their assets?
What must partners in a general partnership do to protect their assets?
How are profits typically divided among partners in a general partnership?
How are profits typically divided among partners in a general partnership?
What role do directors play in a corporation?
What role do directors play in a corporation?
What is a distinguishing feature of private corporations?
What is a distinguishing feature of private corporations?
What does the case 'Ernst & Young Inc v Falconi' illustrate regarding partnerships?
What does the case 'Ernst & Young Inc v Falconi' illustrate regarding partnerships?
What defines the management structure in a general partnership?
What defines the management structure in a general partnership?
What happens when no shares are issued during a corporation's incorporation?
What happens when no shares are issued during a corporation's incorporation?
What is the primary purpose of the first meeting of directors?
What is the primary purpose of the first meeting of directors?
Which type of shares provides higher returns but does not allow voting rights?
Which type of shares provides higher returns but does not allow voting rights?
In what scenario might an incorporator remain involved in a corporation?
In what scenario might an incorporator remain involved in a corporation?
What is a consequence of each partner's individual liability in a general partnership?
What is a consequence of each partner's individual liability in a general partnership?
What is the legal distinction between an incorporator and a director?
What is the legal distinction between an incorporator and a director?
Who is responsible for appointing the directors of the corporation?
Who is responsible for appointing the directors of the corporation?
What is one of the key reasons for creating a limited liability partnership instead of a general partnership?
What is one of the key reasons for creating a limited liability partnership instead of a general partnership?
What type of liability applies if a partner in a general partnership is unable to pay their share of a debt?
What type of liability applies if a partner in a general partnership is unable to pay their share of a debt?
What is a common misconception regarding corporate ownership?
What is a common misconception regarding corporate ownership?
What class of corporate shares guarantees the right to vote for directors?
What class of corporate shares guarantees the right to vote for directors?
What is a common feature of a general partnership regarding regulatory requirements?
What is a common feature of a general partnership regarding regulatory requirements?
What must directors do at annual meetings of shareholders?
What must directors do at annual meetings of shareholders?
What is one common reason that investors may choose non-voting shares?
What is one common reason that investors may choose non-voting shares?
What could happen if a corporation winds up?
What could happen if a corporation winds up?
What risk do partners face when making business decisions in a general partnership?
What risk do partners face when making business decisions in a general partnership?
If shares are never sold by a private corporation, what can be concluded?
If shares are never sold by a private corporation, what can be concluded?
In a general partnership, how is the business income typically prioritized?
In a general partnership, how is the business income typically prioritized?
Which of the following is NOT typically addressed at the directors' organizational meeting?
Which of the following is NOT typically addressed at the directors' organizational meeting?
Why might a corporation choose to use a corporate seal?
Why might a corporation choose to use a corporate seal?
Which term refers to corporations whose shares are available for public purchase?
Which term refers to corporations whose shares are available for public purchase?
What legal document is necessary to officially create a corporation?
What legal document is necessary to officially create a corporation?
What denotes a corporation's legal status upon filing its articles of incorporation?
What denotes a corporation's legal status upon filing its articles of incorporation?
How is the corporate minute book used in a corporation?
How is the corporate minute book used in a corporation?
What can trigger 'special' meetings of shareholders?
What can trigger 'special' meetings of shareholders?
What is a primary feature of a sole proprietorship concerning profit distribution?
What is a primary feature of a sole proprietorship concerning profit distribution?
What is one consequence of Zuri being the sole shareholder in the corporation?
What is one consequence of Zuri being the sole shareholder in the corporation?
What is the significance of the voting shares in the shareholder structure?
What is the significance of the voting shares in the shareholder structure?
What tax treatment does the Canada Revenue Agency apply to income from a sole proprietorship?
What tax treatment does the Canada Revenue Agency apply to income from a sole proprietorship?
What would likely NOT be a reason Zuri, Namid, and Mitchell consulted legal and accounting professionals during incorporation?
What would likely NOT be a reason Zuri, Namid, and Mitchell consulted legal and accounting professionals during incorporation?
What legal liability does an owner of a sole proprietorship face?
What legal liability does an owner of a sole proprietorship face?
What is a potential advantage of employing family members in a sole proprietorship?
What is a potential advantage of employing family members in a sole proprietorship?
What limitation exists regarding capital raising in a sole proprietorship?
What limitation exists regarding capital raising in a sole proprietorship?
Which scenario illustrates unlimited personal liability in a sole proprietorship?
Which scenario illustrates unlimited personal liability in a sole proprietorship?
How does a partnership differ from a sole proprietorship in terms of ownership?
How does a partnership differ from a sole proprietorship in terms of ownership?
What is a requirement for establishing a general partnership?
What is a requirement for establishing a general partnership?
In the absence of a formal partnership agreement, what governs the relationship between general partners?
In the absence of a formal partnership agreement, what governs the relationship between general partners?
What may vary if Zuri, Namid, and Mitchell enter into a formal partnership agreement?
What may vary if Zuri, Namid, and Mitchell enter into a formal partnership agreement?
What is a characteristic of limited liability partnerships compared to general partnerships?
What is a characteristic of limited liability partnerships compared to general partnerships?
Which of the following options accurately describes sole proprietorship funding?
Which of the following options accurately describes sole proprietorship funding?
What is a disadvantage of a sole proprietorship regarding contractual obligations?
What is a disadvantage of a sole proprietorship regarding contractual obligations?
How can a sole proprietor mitigate personal financial risk?
How can a sole proprietor mitigate personal financial risk?
What was the outcome of Aron Salomon's claim regarding his entitlement to repayment of his loan?
What was the outcome of Aron Salomon's claim regarding his entitlement to repayment of his loan?
In which scenario would a corporation not protect individuals from personal liability?
In which scenario would a corporation not protect individuals from personal liability?
Which right under the Canadian Charter of Rights and Freedoms extends to corporations?
Which right under the Canadian Charter of Rights and Freedoms extends to corporations?
What may shareholders apply for when they believe their interests are being disregarded by a corporation?
What may shareholders apply for when they believe their interests are being disregarded by a corporation?
What does the oppression remedy aim to address?
What does the oppression remedy aim to address?
What could potentially happen to directors if a corporation breaches the Consumer Protection Act?
What could potentially happen to directors if a corporation breaches the Consumer Protection Act?
Which best describes the implications of a corporation's special legal status?
Which best describes the implications of a corporation's special legal status?
What is a major factor when a bank or trust company approves a loan for a corporation?
What is a major factor when a bank or trust company approves a loan for a corporation?
In the case of oppression remedy, what does harm caused to the complainant not need to be?
In the case of oppression remedy, what does harm caused to the complainant not need to be?
What can happen if a corporation acts in a way that unfairly prejudices shareholder interests?
What can happen if a corporation acts in a way that unfairly prejudices shareholder interests?
What was the main argument by the corporation in Irwin Toy Ltd v Quebec (AG)?
What was the main argument by the corporation in Irwin Toy Ltd v Quebec (AG)?
How does limited corporate liability influence the business decisions of entrepreneurs?
How does limited corporate liability influence the business decisions of entrepreneurs?
What distinguishes a limited partner's liability compared to a general partner's liability?
What distinguishes a limited partner's liability compared to a general partner's liability?
What happens to the personal liability of Zuri, Namid, and Mitchell in the case of Spark It Enterprises Inc. running into financial trouble?
What happens to the personal liability of Zuri, Namid, and Mitchell in the case of Spark It Enterprises Inc. running into financial trouble?
What is a significant benefit of having limited partners in a business?
What is a significant benefit of having limited partners in a business?
Which of the following statements about a Limited Liability Partnership (LLP) is correct?
Which of the following statements about a Limited Liability Partnership (LLP) is correct?
What must be included in the name of a Limited Liability Partnership?
What must be included in the name of a Limited Liability Partnership?
How can a limited partner jeopardize their limited liability status?
How can a limited partner jeopardize their limited liability status?
For what reason might a business prefer an LLP over a corporation?
For what reason might a business prefer an LLP over a corporation?
Which of the following is NOT a requirement for creating an LLP?
Which of the following is NOT a requirement for creating an LLP?
What liability do partners in an LLP face regarding the negligent acts of supervised staff?
What liability do partners in an LLP face regarding the negligent acts of supervised staff?
What is a common misconception about the liability of limited partners?
What is a common misconception about the liability of limited partners?
In a limited partnership, what is the typical consequence for a business failure when investments are made?
In a limited partnership, what is the typical consequence for a business failure when investments are made?
What is the primary purpose of a limited partnership?
What is the primary purpose of a limited partnership?
What is one of the main characteristics of a Limited Liability Partnership compared to a general partnership?
What is one of the main characteristics of a Limited Liability Partnership compared to a general partnership?
What type of liability do limited partners have in a limited partnership?
What type of liability do limited partners have in a limited partnership?
Why might it be advantageous to file a limited partnership declaration?
Why might it be advantageous to file a limited partnership declaration?
Which type of partnership can be utilized by any business in British Columbia and the Northwest Territories?
Which type of partnership can be utilized by any business in British Columbia and the Northwest Territories?
What common responsibility do general partners have in a limited partnership?
What common responsibility do general partners have in a limited partnership?
What happens if a limited partner engages in management activities?
What happens if a limited partner engages in management activities?
What formal requirement is necessary to create a limited partnership in Ontario?
What formal requirement is necessary to create a limited partnership in Ontario?
Which of the following best describes the relationship of partners in a limited partnership?
Which of the following best describes the relationship of partners in a limited partnership?
What is one disadvantage of a limited partnership compared to a general partnership?
What is one disadvantage of a limited partnership compared to a general partnership?
What does the Limited Partnerships Act require to be kept on the premises of a limited partnership?
What does the Limited Partnerships Act require to be kept on the premises of a limited partnership?
How are profits shared among partners in a limited partnership?
How are profits shared among partners in a limited partnership?
Which of the following actions can a limited partner take without losing their limited status?
Which of the following actions can a limited partner take without losing their limited status?
What is typically the tax implication for limited partners in a limited partnership?
What is typically the tax implication for limited partners in a limited partnership?
What is a potential risk if a limited partner becomes actively involved in management?
What is a potential risk if a limited partner becomes actively involved in management?
In what circumstance can a limited partner require the return of their investment?
In what circumstance can a limited partner require the return of their investment?
What allows third parties to reasonably believe that a general partner has authority?
What allows third parties to reasonably believe that a general partner has authority?
Flashcards
Business Forms
Business Forms
Different legal structures for businesses, like sole proprietorships, partnerships, and corporations.
Sole Proprietorship
Sole Proprietorship
A business owned and run by one person, where the owner and the business are legally the same.
Partnership
Partnership
A business owned and run by more than one person.
Corporation
Corporation
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Legal Regime
Legal Regime
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Personal Liability
Personal Liability
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Business Name Registration
Business Name Registration
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Choosing a Business Form
Choosing a Business Form
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Sole Proprietorship Tax
Sole Proprietorship Tax
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Sole Proprietorship Income Splitting
Sole Proprietorship Income Splitting
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Sole Proprietorship Liability?
Sole Proprietorship Liability?
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Sole Proprietorship Financing
Sole Proprietorship Financing
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General Partnership Form
General Partnership Form
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Partnership Agreement Importance
Partnership Agreement Importance
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General Partnership Liability
General Partnership Liability
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Legal Consequences of Unregistered Business Name
Legal Consequences of Unregistered Business Name
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Trademark Registration
Trademark Registration
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Sole Proprietorship's Legal Status
Sole Proprietorship's Legal Status
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Sole Proprietor's Liability
Sole Proprietor's Liability
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Sole Proprietorship's Contractual Obligations
Sole Proprietorship's Contractual Obligations
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Sole Proprietorship's Tax Return
Sole Proprietorship's Tax Return
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Advantages of a Sole Proprietorship
Advantages of a Sole Proprietorship
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Disadvantages of a Sole Proprietorship
Disadvantages of a Sole Proprietorship
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Sole Proprietorship's Role in Profit Sharing
Sole Proprietorship's Role in Profit Sharing
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Sole Proprietorship's Scalability
Sole Proprietorship's Scalability
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Impact of Sole Proprietorship on Business Growth
Impact of Sole Proprietorship on Business Growth
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Sole Proprietorship: Risk and Rewards
Sole Proprietorship: Risk and Rewards
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Business Structure
Business Structure
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General Partnership
General Partnership
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Limited Partnership
Limited Partnership
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Limited Liability Partnership (LLP)
Limited Liability Partnership (LLP)
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Private Corporation
Private Corporation
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Public Corporation
Public Corporation
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Co-operative Corporation
Co-operative Corporation
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Agent
Agent
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Joint Venture
Joint Venture
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Licensing
Licensing
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Franchising
Franchising
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Unlimited Liability
Unlimited Liability
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Limited Liability
Limited Liability
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Business Name Registration (General Partnership)
Business Name Registration (General Partnership)
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Joint and Several Liability
Joint and Several Liability
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Partner's Conduct
Partner's Conduct
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Personal Assets Liability
Personal Assets Liability
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Equal Power and Responsibility
Equal Power and Responsibility
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Partnership Agreement
Partnership Agreement
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Profit Distribution (General Partnership)
Profit Distribution (General Partnership)
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Decision Making (General Partnership)
Decision Making (General Partnership)
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Advantages of General Partnership
Advantages of General Partnership
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Disadvantages of General Partnership
Disadvantages of General Partnership
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Agency Principle
Agency Principle
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Impact of Partner's Errors
Impact of Partner's Errors
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Why Limited Liability Partnerships Exist
Why Limited Liability Partnerships Exist
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General Partnership Structure
General Partnership Structure
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Default Partnership Provisions
Default Partnership Provisions
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Profit Sharing in a General Partnership
Profit Sharing in a General Partnership
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Tax Implications of a General Partnership
Tax Implications of a General Partnership
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Unlimited Liability in a General Partnership
Unlimited Liability in a General Partnership
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Pooling Resources
Pooling Resources
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Economies of Scale
Economies of Scale
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Attracting Larger Clients
Attracting Larger Clients
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Minimizing Risk in Partnerships
Minimizing Risk in Partnerships
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Benefits of a General Partnership
Benefits of a General Partnership
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Silent Partner
Silent Partner
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Limited Partnership Agreement
Limited Partnership Agreement
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LLP Registration
LLP Registration
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Professional Negligence
Professional Negligence
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LLP Liability
LLP Liability
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Partnership Property
Partnership Property
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LLP Disadvantages
LLP Disadvantages
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LLP Agreement
LLP Agreement
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LLP Name
LLP Name
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General Partnership vs LLP
General Partnership vs LLP
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Limited Partner
Limited Partner
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General Partner
General Partner
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Formation of a Limited Partnership
Formation of a Limited Partnership
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Partnership Declaration
Partnership Declaration
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Agency Authority
Agency Authority
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Limited Partner's Risk of Becoming a General Partner
Limited Partner's Risk of Becoming a General Partner
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Limited Partner's Right to Investment Return
Limited Partner's Right to Investment Return
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Limited Partner's Role in Management
Limited Partner's Role in Management
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Tax Implications of a Limited Partnership
Tax Implications of a Limited Partnership
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Benefits of a Limited Partnership
Benefits of a Limited Partnership
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Drawbacks of a Limited Partnership
Drawbacks of a Limited Partnership
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Why is a partnership agreement important?
Why is a partnership agreement important?
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What does a partnership agreement cover?
What does a partnership agreement cover?
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LLP vs. General Partnership
LLP vs. General Partnership
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Limited Partnership Liability
Limited Partnership Liability
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Corporate Existence
Corporate Existence
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What is a corporation?
What is a corporation?
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Advantages of a Partnership
Advantages of a Partnership
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Disadvantages of a Partnership
Disadvantages of a Partnership
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What is a limited liability partnership?
What is a limited liability partnership?
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How does a partnership agreement help with disputes?
How does a partnership agreement help with disputes?
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Why is a partnership agreement important for LLPs?
Why is a partnership agreement important for LLPs?
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What are the different types of partnerships?
What are the different types of partnerships?
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Incorporator
Incorporator
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Shareholder
Shareholder
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Director
Director
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What role do directors play in a corporation?
What role do directors play in a corporation?
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How are corporations created?
How are corporations created?
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What rights do shareholders have?
What rights do shareholders have?
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What is the relationship between shareholders and directors?
What is the relationship between shareholders and directors?
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What is the significance of the certificate of incorporation?
What is the significance of the certificate of incorporation?
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What happens after a corporation is incorporated?
What happens after a corporation is incorporated?
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Are shareholders liable for the corporation's debts?
Are shareholders liable for the corporation's debts?
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Are directors liable for the corporation's debts?
Are directors liable for the corporation's debts?
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First Meeting of Directors
First Meeting of Directors
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Voting Shares
Voting Shares
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Non-Voting Preferred Shares
Non-Voting Preferred Shares
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Electing Directors
Electing Directors
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Shareholders' Agreement
Shareholders' Agreement
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Annual Shareholders' Meeting
Annual Shareholders' Meeting
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Special Shareholders' Meeting
Special Shareholders' Meeting
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Corporate Minute Book
Corporate Minute Book
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Corporate Seal
Corporate Seal
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Share Certificate
Share Certificate
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Advertising Shares in a Private Corporation
Advertising Shares in a Private Corporation
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Corporate Setup Costs
Corporate Setup Costs
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Sole Director and Shareholder
Sole Director and Shareholder
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Federal or Provincial Incorporation
Federal or Provincial Incorporation
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Maintaining Corporate Minute Book
Maintaining Corporate Minute Book
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Oppression Remedy
Oppression Remedy
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Shareholder Liability
Shareholder Liability
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Appraisal Rights
Appraisal Rights
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Restructuring
Restructuring
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Controlling Shareholders
Controlling Shareholders
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Separate Legal Entity
Separate Legal Entity
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Salomon v Salomon & Co Ltd
Salomon v Salomon & Co Ltd
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Personal Guarantee
Personal Guarantee
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Charter Protections for Corporations
Charter Protections for Corporations
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Corporate Directors' Liability
Corporate Directors' Liability
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Derivative Action
Derivative Action
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Irwin Toy Ltd v Quebec (AG)
Irwin Toy Ltd v Quebec (AG)
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Downtown Eatery (1993) Ltd v Ontario
Downtown Eatery (1993) Ltd v Ontario
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Benefits of Corporation
Benefits of Corporation
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Drawbacks of Corporation
Drawbacks of Corporation
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Impact of Salomon's Principle
Impact of Salomon's Principle
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Corporate Records
Corporate Records
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Provincial vs. Federal Incorporation
Provincial vs. Federal Incorporation
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Extraprovincial Registration
Extraprovincial Registration
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NUANS Report
NUANS Report
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Coined Name
Coined Name
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Legal Entity
Legal Entity
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Insolvency
Insolvency
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Secured Creditor
Secured Creditor
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Goodwill
Goodwill
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Corporate Structure
Corporate Structure
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Shareholders, Directors, Officers, Employees
Shareholders, Directors, Officers, Employees
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Study Notes
Forms of Carrying on Business
- Canadian law offers various business structures, most common being sole proprietorships, partnerships, and corporations.
- Each structure has a legal framework governing creation, internal affairs, relations with other businesses, taxation, and liability.
- Every business operates within a legal framework, even informal ones like Uncle Izzy's fortune-telling business.
Sole Proprietorship
- Definition: A single person owns and operates the business, legally indistinguishable from the owner.
- Creation: Formed when a person begins a publicly-facing business venture (e.g., selling jam at fairs).
- Registration: Required to register a business name different from the owner's, to provide clarity to the public.
- Legal Characteristics: No separate legal entity; the owner is responsible for all liabilities and contracts. Income is reported on personal tax returns.
- Advantages: Simple to establish and manage, maximum control.
- Disadvantages: Unlimited personal liability; limited ability to raise capital, limited to the owner's resources.
- Implications for Spark It: Zuri could run Spark It as a sole proprietorship, contracting with Namid and Mitchell as employees, but this presents high personal risk.
Partnership
- Types: General partnerships, limited partnerships, and limited liability partnerships (LLPs) are common.
- General Partnership: Two or more people operate a business together; shared liability (joint and several).
- Formation: Happens when two or more people enter a business together for profit.
- Liability: Unlimited personal liability for all partners; includes joint and several liability
- Partnership Agreement: Strongly recommended to specify rights and responsibilities; minimizes conflicts and ensures clarity on profit sharing to partners.
- Tax Implications: Income is part of each owner's personal income for tax.
- Implications for Spark It: General partnerships allow multiple owners, but shared liability. Each partner bears unlimited liability.
Limited Partnership
- Definition: Combines general and limited partners.
- General Partners: Manage the business, unlimited liability.
- Limited Partners: Provide capital, limited liability (limited to their investment).
- Implications for Spark It: Angelic could act as a limited partner, bringing capital without facing unlimited liability; Namid may prefer this style if wanting to contribute capital without managerial responsibilities.
Limited Liability Partnership (LLP)
- Definition: Offers the flexibility of a general partnership, without the unlimited liability. Only available to certain professions.
- Liability: Partners are not liable for general debts or issues that arise from other partners’ negligence in specific professional services.
- Formation: Requires a formal partnership agreement.
- Implications for Spark It: Not applicable as Zuri, Namid, Mitchell, and Angelic are not operating within a qualifying profession to make use of this business form.
Corporations
- Definition: Separate legal entity from its owners (shareholders).
- Characteristics: Can enter contracts, own property, sue, and be sued independently of its owners.
- Limited Liability: Protects shareholders from personal liability for corporate debts.
- Players: Incorporators (establish), shareholders (own), directors (manage), and officers (run).
- Types: Private (limited ownership) and public (publicly traded).
- Implications for Spark It: A corporation could offer limited liability to all, simplifying funding and reducing risks, but setting one up is complex.
Additional Considerations
- Partnership Agreements: Crucial for outlining roles, responsibilities, profit sharing, and termination protocols.
- Liability: Sole proprietorships have unlimited liability; partners face joint and several liability in general partnerships; limited liability is key for corporations.
- Financing: Sole proprietorships rely on debt, while corporations can raise capital through shares and debt.
- Tax Implications: Different structures result in different tax treatments.
- Legal Counsel: Consulting a lawyer is vital to tailor the choice to the business needs, especially regarding incorporation or legal agreements.
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Description
Test your knowledge on business structures, focusing on sole proprietorships and their implications. This quiz explores the responsibilities of business owners, the impact of legal frameworks, and considerations for different types of businesses, including Indigenous enterprises. Understand the nuances and challenges of choosing the right business form.
