Business Law and Practice - Forms of Business Media

Question 1

Incorporated v Unincorporated

Answer 1

Unincorportated: requires very few formalities before it exists (e.g. sole traders) and do not exist as separate legal entities

Incorporated: formal registration process required before it comes into existence (e.g. private limited companies and LLPs), legal entities in their own right

Question 2

General Partnership

Answer 2

Unincorporated

More than one party

Governed by Partnership Act 1890

Contractual relationship between partners

Each partner has unlimited liability - jointly and severally liable for all of the business debts

Question 3

Limited Partnerships

Answer 3

Governed by Limited Partnerships Act 1907

2 types of partner: general partner (unlimited liability) and limited partner (limited liability) - must be one of each

Limited partners do not have any control over how the business is run

Must be registered with Registrar of Companies House

Owners liable to pay taxes on any profits

Question 4

Limited Liability Partnership (LLP)

Answer 4

Hybrid of limited company and general partnership

Limited liabilty

Partners liable for the amount of capital they have invested

Each partner is responsible for paying tax on their share of profits.

Question 5

Company

Answer 5

Separate legal entity

Limited liability for owners - company liable for its own debts

Private limited companies; at least one director

Public limited companies; at least two directors