In Canada there are four structures of business one can choose from, the sole proprietorship, partnerships, corporations or limited companies (Bates, 2003).
Sole proprietorship, are business types where the owner has full responsibility of everything in regard to the company. They owner will be responsible for all the debts of the business and he will enjoy the profits alone and also suffers losses alone. Being the sole owner of the business any individual who is a creditor to the company can make claims to the personal property of the owner if they default in credit repayment. An advantage of sole proprietorship: It is a relatively easy and inexpensive form of business as one only needs to register the name. This is only different in Labrador and Newfoundland. A disadvantage for sole proprietorship is the owner has unlimited liability, which means that the debts by the business can be offset by use of the personal property of the owner (Bates, 2003).
A partnership is a form of business where to or more people join and form a business. It is a good form of business if an individual decides to partner with other people who share a common plan in business and they decide not to incorporate the business. In a partnership, the partners will combine their financial resources and ideas so as to start and run the business. Individuals have to develop terms of agreement by making the partnership deed which stipulates how to handle disagreements, and issues to do with dissolution. Partner, have to share in the profit of the company according to the terms of your agreement of the partnership and their contribution in the business. Partners have unlimited liability, which means that their personal property and assets can be used by creditors to pay business debts.
An individual can decided to be a limited liability partner, if he or she makes decisions not to participate in the running and control of the business venture. But the limited liability partner is also to some extent liable for some debts in the business.
During the formation of a partnership, it is crucial for there to be a partnership agreement which will be prepared by a lawyer, this will assist in:
- Ensuring one’s interests in the partnership are safeguarded
- Ensuring that the terms of the partnership in issues regarding sharing of profit dissolution of the partnership, and other are defined
- To ensure that all the legal in regards and if there are cases of limited partnership are addressed
An advantage of partnership is, that the startup capital will be easy to raise, as a number of people will be involved in raising the funds. One disadvantage of partnership is that there exists no legal difference between the business and the owners.
This is a form of business that is done either at the federal on the provincial level. A business that has been incorporate is a legal entity that is very different or separate from the shareholders who are the owners. When one is a shareholder of a corporation, they cannot be held responsible for the company debts, its obligations or any act that the corporation engages itself in. A corporation can sue or be sued
An advantage of forming a corporation over other forms of bussines ownership. is that owners have limited liability and it is relatively easy to transfer ownership. A disadvantage of forming a corporation is that the business of a corporation is closely regulated by the authorities.
3. William has decided to form a closely held corporation. He is now having problems thinking of a suitable descriptive trading name for his corporation. Explain to him 4 types of names that the law might not allow and give an example of a name that might not be allowed. (5 marks)
In Canada a business cannot be registered if it has a name that is already registered. Also a business cannot be allowed to have a name which suggests having any form of connection to the Government of Canada, the Crown, the Royal Family, or the First Nation, this can only be allowed if one has express authority granted to do this. A business is also not permitted to use such names as Amalgamated, Institute, College, Engineer, Engineering, University use of any initials and Numerals. An example of a name that cannot be allowed is Queen Elizabeth 2 Amalgamated (Boone, 2010).
Control — one of the issues a court will address is whether an individual receives any directing and control of others in regard to place, time, and how the work is performed. It will also address how an individual is hired, how instructions are passed, how he is supervised, the method used to discipline and how he is controlled. If an individual has a degree of control, there is a huge likelihood that the individual is an employee. An example of the decision was Regina v. Walker, (1858) 27 L.J.M.C. 207(Gilbert, 2006)
Profit is another determinant; the court will put into consideration whether the individual has any chance from getting any profits from the business. If the income of the individual is always constant irrespective of the profits made by the company, then the person is an employee. For the case of one earnings being calculated from the cost of a service and the price charged then one is not an employee. An example of the decision was 671122 Ontario Ltd. v. Sagaz Industries Canada Inc., ( Gilbert, 2006)
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Payment — it is also used by the courts to determine whether an employee or a contractor, if one receives payment at regular intervals that are set. An employee will receive payment irrespective of the customers paying or their satisfaction, but a contractor will receive payment in regard to customer satisfaction and payment for good or services. An example of the decision was 671122 Ontario Ltd. v. Sagaz Industries Canada Inc., ( Gilbert, D. (2006)
a. Wanted a male mechanic for private garage.
The Discrimination legislation even though it gives rooms to those recruiting to choose one gender or because of the various reasonable occupational requirements, it is important they be stated in the advert. The advert is also sex discriminatory as it only states that it wants a man, as this is an arrangement to deny women to work.
B. Position available for experienced truck driver must hold a clean drivers’ licence.
The advert states the skills but is not specific on the term “experience” it should be clear.
c. Immediate vacancy for young, energetic sales person, apply within.
The Employment Equality (Age) Regulations does not allow a person recruiting to discriminate on the basis of age. This ad discriminates against the old people instead it should have the necessary qualifications and skills, so that only appropriate applicant can hired irrespective of their age. The advert is also age discriminatory and by the word ‘energetic’ can discriminate against people who are not energetic but able to perform the job, thus my exclude people who are sick and thus it is discriminatory.
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3. The following employees have been dismissed on “just cause” grounds. Do you think the employer was justified, in each case, give reasons for your answer? Also explain what is meant by “just cause”. a. Sue was caught stealing a large amount of money from the till. b. A police officer was dismissed as she was found handling drugs while off duty. c. An employee of a bank refused a position to work in an overseas branch, as he said he was a refugee and should he return to that country he would almost certainly be tortured or face the death sentence.
Just Cause is a term that means an employer has the justification to terminate an employee’s services without the provision of an adequate notice or making payment to replace notice. For a court to determine just cause, it will consider where the misconduct by the said employee can be well proven and if the degree of the misconduct an employee has conducted is sufficient to justify termination without any notice (Christie, 1980).
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a. Sue was caught stealing a large amount of money from the till.
There was just cause to terminate her services as Sue engaged in dishonesty. Dishonest is a misconduct which is an indicator of employee’s total disregard of the inherent trust that the employer has accorded them. Acts of theft and fraud are good examples of dishonesty, Sue termination was a just causes as she was caught stealing. Thus there was proof and he act has sufficient grounds for a just cause.
b. A police officer was dismissed as she was found handling drugs while off duty
This was not a just cause as the employee’s job involved handling drugs if on duty. Therefore handling drugs by the police, though an act of is not very serious for it to warrant a dismissal of the individual without being accorded notice.
c. An employee of a bank refused a position to work in an overseas branch, as he said he was a refugee and should he return to that country he would almost certainly be tortured or face the death sentence.
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This is not a just cause, as it did not constitute any reasons for a just cause such as dishonesty, insubordination, incompetence, breach of trust, absenteeism, sexual harassment of misrepresentation during hiring. This cannot be considered as insubordination as the person has a what one can consider reasonable grounds for then not want to be transferred. It is for the company to ascertain whether the claims are true or false. But the reason is not a just cause for termination without notice