Partnerships, LP & LLPS Flashcards
Sole Trader:
How it conducts business?
Personally
Sole Trader:
Legal Status?
No separate legal identity
Sole Trader:
Liability of investors?
Unlimited
Sole Trader:
Governing Statute?
None
Sole Trader:
3rd parties contract with …
Individual
Sole Trader:
Owner?
Individual
Sole Trader:
No. of persons for setting up?
1
Company:
How it conducts business?
via Company
Company:
Legal Status?
Separate legal identity
Company:
Liability of investors?
Limited
to amount unpaid on shares - s.3(2) CA 2006
Company:
Governing Statute?
The Companies Act 2006
Company:
3rd parties contract with …
Company
Company:
Owner?
Shareholders
Company:
Managed by?
Board of Directors
Company:
No. of persons for setting up?
1 Person (Individual or company)
s.7(1) CA 2006
Partnership:
How it conducts business?
Personally
Partnership:
Legal Status
No separate legal identity
Partnership:
Liability of investors
Unlimited personal (Joint = contractual / tortious = Joint and Several)
Partnership:
Governing Statute
The Partnership Act 1890
Partnership:
3rd party contracts made with …
Individual partners
Partnership:
Owners?
Partners
Partnership:
Managed by?
Management Board
Partnership:
No. of persons for set-up
2
LP:
How it conducts business?
General partners = personally
LP:
Legal Status
No separate legal identity
LP:
3rd party contracts made with …
General partner
LP:
Owners
General partner
LP:
Managed by …
General partner
LP:
No. of persons for set-up
1 General partner
1 Limited partner
LLP:
How it conducts business?
via company
LLP:
Legal Status
Separate legal identity
LLP:
Liability of investors
Limited
to amount of their capital share in the LLP
LLP:
Governing Statute
The Limited Liability Partnership Act 2000
LLP:
3rd party contracts made with …
Company
LLP: Owners
Members (persons)
LLP: Managed by …
Members / Designated Members
LLP: No. of persons for set-up
2+
What kinds of business need a registered office?
1) LLP
2) Limited Company
Who passes an ordinary resolution?
Shareholders
How many directors does a private company need?
1
How many directors does a public company need?
2
LLP: Expenses before/due to setting up the business
1) Incorporation document
2) Registration fee
3) Recommended to have LLP PA drawn up by lawyers
4) Printing on LLP stationary
LC: Expenses before/due to setting up the business
1) Incorporation document (AoA / MoA)
2) Registration fee
3) Printing on LLP stationary
Disclosures aren’t required for which business mediums?
1) Sole Trader
2) Partnership
What disclosures are required for LLP?
1) Registered office - s.2(2)(c) and (d) LLPA and 2009 Regs
2) Details of members - s.2(2)(e) LLPA
3) Details of designated members - s.2(2)(f) LLPA
4) Accounts - 2008 Regs
5) PSCs
6) Payment practices and policies (large LLPs)
What disclosures are required for Limited Companies?
1) Registered office - s.86 CA 2006
2) Accounts - s.441 CA 2006
3) Information on directors and members
4) Info on share capital of a company
5) Certain resolutions of members
6) A ‘PSC’ Register
7) Payment practices and policies (large companies)
What ongoing expenses are there after a Sole Trader / Partnership is set up?
None, though Accountants to keep accounts
What ongoing expenses are there post-set up for a LLP / Companies?
1) Accountants (for annual accounts)
2) Must file audited accounts (bar small LLPs/companies)
3) Must file a Confirmation Statement at least once a year - SBEEA 2015
Sole Trader: How is it managed?
No legal requirements
Partnership: How is it managed?
In accordance with PA (default provisions in PA 1890)
LLP: : How is it managed?
In accordance with PA
LC: : How is it managed?
Meeting of directors and shareholders (according to CA 2006 and AoA)
Sole Trader: Available methods of financing?
Can borrow
Partnership: Available methods of financing?
Can borrow
LLP: Available methods of financing?
1) Can borrow
2) Can create floating charges
- If any financing is underwritten by a member’s personal guarantee, limited liability lost
LC: Available methods of financing?
1) Can borrow
2) Can create floating charges
3) Can raise finance by issuing shares
- If any financing is underwritten by a member’s personal guarantee, limited liability lost
