COMM 1010- Business Entity Structures and Classifications

Sole Proprietorship

• Characterized by limited lifestyle and existence.

• If the owner (older) dies or no longer exists:

  • The business ceases to exist.

  • Owner can close the business.

  • Procedures for closing a sole proprietorship include:

  • Taking losses for profit.

  • Closing the bank account.

  • Transferring funds into the owner's personal account.

Corporations

Definition and Characteristics

• Corporations are recognized as the most protected business entities.

• Distinction between owners and the entity:

  • Owners' rights are separate from the rights of the corporation.

  • Allows business owners to operate independently from the organization.

Rights and Responsibilities

• Considerations when forming a corporation:

  • Determine the company's purpose and activities.

  • Understand the separate rights of the company and its owners.

Ownership Structure

Private vs. Public Corporations

• Description of private corporations:

  • Ownership is held through shares but not available for public purchase.

  • Examples of private companies include those previously public but now privately owned (e.g., WestJet).

• Public corporations:

  • Shares are available for public trading.

Transition Between Private and Public

• Formerly public corporations can transition to private status.

• This change in status can lead to different operational dynamics.

Summary and Further Clarifications

• Importance of understanding structural differences between sole proprietorships, private corporations, and public corporations.

• There may be contextual examples provided that were not explicitly stated in the notes.

• It is suggested to double-check external references or examples for accuracy, indicating a need for careful consideration before reliance on those materials.