Business Structures Flashcards
1
Q
Partnership
A
- Partnership Act 1890
- Partners have joint and several UNLIMITED liability
- Partners together constitute the partnership - no separate legal personality.
- At least 2 persons needed.
- No docs required on start up, bnut partnership agreement advisable.
- No disclosure requirements
- Limited ongoing expenses (will often usually pay accountants though)
- Management structure - as per partnership agreement or default provisions in PA1890.
- Finance: CANNOT create floating charges nor issue shares.
2
Q
Limited Partnerships
A
- Limited Partnership Act 1907 (and PA 1890)
- General partner unlimited liability; Limited partner limnited to amount of contribution.
- Partners together constitute the partnership; no separate legal personality.
- At least 2 persons needed
- No docs necessary, but partnership agreement advisable.
- Must, on formation, deliver to Registrar (and notify Registrar of any changes to):
> Firm name
> General nature of partnership business
> Address/principal place of business
> Name of each general and limited partner
> If partnership has a term (i.e. a set duration)
> Amount of capital contribution of each limited partner - Ongoing expenses minimal - often have accountants
- General partners manage as per partnership agreement; limited partners not involved in day-to-day management - default provisions in PA 1890 have limited application.
- Finance: CANNOT create floating charges nor issue shares.
3
Q
Limited Liability Partnerships
A
- Limited Liability Partnerships Act 2000 (+ 2001 Regs)
- Liability of individual partners limited to amount they agreed to pay under their LLP agreement
- Separate legal entity
- At least 2 persons needed (if business carried on for over 6 months with 1 member, that member becomes jointly and severally liable with the LLP for debts after 6 month period).
- On formating: Incorporation document, registration fee - no articles or memorandum but recommended to have LLP agreement.
- LLP name must appear on same documents as required for companies.
- Must disclose to Registrar: > Registered office > Accounts > Details of members and PSCs > Details of 'designated members' - those with administrative responsibilities for the running of the LLP - (many restrictions that apply to company directors do not apply!)
- Must prepare annual audited accounts and file annual confirmation statement.
- Management structure down to LLP agreement; limited formalities for management/procedure.
- Finance: CAN create floating charges but CANNOT issue shares.
4
Q
Company limited by shares
A
- CA2006
- Liability of members limited to any amount unpaid on their shares - s. 3(2) CA2006)
- Separate legal entity
- Minimum 1 person needed - s. 7 CA2006
- On formation: Incorporation documents, articles of association (if MA not adopted), registration fee, stationery.
- Must disclose:
> Regisetered office - ss. 9(5) and 853B CA2006
> Accounts - s. 441 CA2006
> Information on directors and secretary if company has one, members, PSCs and capital - s.853B CA200
> Certain resolutions of the members
> Charges over the company’s assets (s. 859A CA2006) - Must prepare annual audited accounts and file annual confirmation statement.
- Strict requirements on management and procedure - articles + CA.
- Finance: CAN create floating charges and can issue shares.