Business entity summary
COMPARISON OF THE FORMS OF BUSINESS ORGANISATIONS
Definition
Sole-Proprietorship
A business owned by one person
Partnership
An association of two or more persons carrying on business in common with a view to profit
Limited Partnership (LP)
A partnership consisting of two or more persons, with at least one general partner and one limited partner Limited Liability Partnership (LLP)
A partnership where the individual partner’s own liability is generally limited Company
A business form which is a legal entity separate and distinct from its shareholders and directors
Owned by
One person
Generally between 2 and 20 partners. A partnership of more than 20 partners must incorporate as a company under the Companies
Act, Chapter 50 (except for professional partnerships)
At least 2 partners; one general partner and one limited partner. No maximum limit.
At least 2 partners, no maximum limit. Exempt Private Company –20 members or less and no corporation holds beneficial interest in the company’s shares
Private Company – 50 members or less Public Company – can have more than 50 members
Legal Status
Not a separate legal entity
Not a separate legal entity
Not a separate legal entity
A separate legal entity from its partners A separate legal entity from its members and directors
Owner has unlimited liability
Partners have unlimited liability
General partner has unlimited liability Partners have limited liability
Members have limited liability
Limited partner has limited liability
Can sue or be sued in individual’s own name
Can sue or be sued in firm’s name
Can probably sue or be sued in firm’s name
Can sue or be sued in LLP’s name
Can sue or be sued in company’s name Can own property in individual’s name Cannot own property in firm’s name
Cannot own property in firm’s name
Can own property in LLP’s name
Can own property in company’s name Owner
Definition
Sole-Proprietorship
A business owned by one person
Partnership
An association of two or more persons carrying on business in common with a view to profit
Limited Partnership (LP)
A partnership consisting of two or more persons, with at least one general partner and one limited partner Limited Liability Partnership (LLP)
A partnership where the individual partner’s own liability is generally limited Company
A business form which is a legal entity separate and distinct from its shareholders and directors
Owned by
One person
Generally between 2 and 20 partners. A partnership of more than 20 partners must incorporate as a company under the Companies
Act, Chapter 50 (except for professional partnerships)
At least 2 partners; one general partner and one limited partner. No maximum limit.
At least 2 partners, no maximum limit. Exempt Private Company –20 members or less and no corporation holds beneficial interest in the company’s shares
Private Company – 50 members or less Public Company – can have more than 50 members
Legal Status
Not a separate legal entity
Not a separate legal entity
Not a separate legal entity
A separate legal entity from its partners A separate legal entity from its members and directors
Owner has unlimited liability
Partners have unlimited liability
General partner has unlimited liability Partners have limited liability
Members have limited liability
Limited partner has limited liability
Can sue or be sued in individual’s own name
Can sue or be sued in firm’s name
Can probably sue or be sued in firm’s name
Can sue or be sued in LLP’s name
Can sue or be sued in company’s name Can own property in individual’s name Cannot own property in firm’s name
Cannot own property in firm’s name
Can own property in LLP’s name
Can own property in company’s name Owner