Forms of Business Ownership

Canadian Business Types

In Canada, we generally have 4 types of business structures:1. Sole Proprietorships2. Partnerships3. Corporations4. Cooperatives

Sole Proprietorships

• Individuals that register this type of business are solely responsible for any debts (obligations), but all profits are theirs to keep.•As a sole proprietor, creditors can

make a claim (can sue you) and can take your business assets as well as your personal assets (your house!)

Partnerships

•When two or more individuals set up a business, they are said to have a partnership.• They must develop a partnership

agreement (a legal document) that states to what extent each partner is involved and/or liable.

Corporations

•When you incorporate your business, it becomes a separate legal entity from the owners or shareholders.•As a shareholder of a corporation, you

are not responsible for the debts of a corporation should the corporation go bankrupt.

Cooperatives

•A business that is owned by a group of members.• The least common business structure

in Canada.•Members have limited liability, and

voting rights are typically assigned equally based on membership (democratic)

Some Research

There are advantages and disadvantages of each type of business. Do some research using the link below and fill out the advantages/disadvantages table on the back side of this sheet.

http://www.canadabusiness.ca/eng/page/2853/#toc-_sole_proprietorship