Types of Businesses Flashcards
Sole propietorship
one party default this option unless stated otherwise Fully Liable No preferred rate no deferral transfer tax
General Partnership
Two parties or more (default) full Liability joint and several liability no defferal or preferred rate -profit/ losses control is majority rules transfer tax applies Partners are agents of the partnership Vicarious Liability
Partnership act
-2 or more parties conducting a business enterprise with a sharing of risk -profit/loss
-Joint of an asset does not create partnership
-partnership agreement in writing otherwise
Default rules
1. Equal obligation for partners to contribute capital
2. no interest is payable in capital
3. no remuneration for partners
4. Each partner has equal entitlement to profit/loss
-All partners have rights to financial records
- all ordinary business decisions are done on majority rules
-Unanimous votes are for admitting a new partner or expelling an old partner
-Principle of identification for disproportional contribution
Window of Liability
from the moment you commence as a partner to the moment you cease
Termination of a partnership interest
- Death, Bankruptcy, mentally incompetent
- Expiry of preset time
- Completion of project
- Court Order
- Resignation with notice
Limited partnership
- Limited partner has limited liability
- registered with provincial governments
- must be one or more general partners and one more limited partner
- limited partner may not manage
- name of L.P may y not be in firm nam
- tax defferral
Limted liability Partnership
Creates exceptions for no vicarious liability for partners torts
-Professional Parnership
Incorportaion
Createsd a legal Person -limited Liability Taxation on a corporate rate -preffered defferal tax rate -control -no transfer tax
What steps do you need to take to make a corporation?
Provincial-register in each province you do business in Reserve name/ approval -cant be similar to another company -cant sound like it crown owned -good taste Notice of Articles Rules Summary of incorporation Agreement Offices Certificate of Incorporation
Shareholders
- owners
- limited liability
Common Shares
Basic equity shares
Preferred Shares
- Dividends priority
- return of capital
Voting share vs non voting share
The difference one votes on decisions
Directors
Decision makers Limited Liability Exceptions -Fraud -Statutory Exception -GST -PST -Employee remittances -WCB -Wages
Officers
President Secretary Decision implementers Official signatures Limited liabilities
