Sole Proprietorship

3410 Words Sep 27th, 2011 14 Pages
CHAPTER FOUR SOLE PROPRIETORSHIP

I.

INTRODUCTION

The sole proprietorship is the simplest form of “business association” we will examine. It is perhaps a bit odd to describe it as a form of “association” given that the “sole” proprietor will be the only “equity” investor and thus doesn’t “associate” with anyone else as a co-equity investor. However, there will almost invariably be “associations” that the sole proprietor will have in order to carry on the business. These can include associations with employees, agents, lenders (such as a bank) and trade creditors. This chapter looks at the structure of the sole proprietorship, its formation, legal status, name registration requirements, funding, management, and dissolution. It also
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This direct liability of the sole proprietor arising out of the conduct of the business together with the access of creditors to not just the business assets but also all other assets of the sole proprietor is what is meant by the “personal liability” of the sole proprietor. This is in contrast with other forms of business association we will examine in which the investor’s liability may be limited to the assets of the business (i.e. “limited liability”).

V.

NAME

Objectives: Closed / Open Book Be able to: (i) Set out the elements of the requirement to register the business name. (ii) Discuss the various purposes that the registry may serve. Open Book Be able to apply the name registration requirement to a fact pattern.

A.

The Business Name Registration Requirement

One can carry on business as a sole proprietor in one’s own name without having to register the name. However, where one uses a name other than one’s own name, or uses a name indicating a plurality of persons, then one must register the name. This is true not just in B.C. but in other jurisdictions as well. In several other provinces the name registration requirement is set out in a Business Name Registration
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