Sole proprietorship and fiduciary duty
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1) What is a sole proprietorship? Why are sole proprietors held personally liable for the debts of their businesses?
2) What is the fiduciary duty of loyalty? Did Gaffney act ethically in this case? Did he and his partners breach their fiduciary duty of loyalty?
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Sole proprietorship and fiduciary duty are examined.
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1) What is a sole proprietorship? Why are sole proprietors held personally liable for the debts of their businesses?
A sole proprietorship represents an unincorporated business wherein there is only one owner responsible for paying personal income tax on profits from the business. This is the most simplistic form of business and there is little government regulation, which enables the business to be easily set up or dismantled. These types of businesses are popular among individual self contractors, but because no separate legal entity is created in a sole proprietorship, the sole proprietor will be personally liable for any debts the business entity incurs unlike corporations and limited partnerships. Quintessentially debts of the sole ...
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