A Case Study Of Alehandro As A Accountancy Company

Alehandro is an accountant. He wants to set up his own accountancy business. He has a few customers arranged. His sister, Miranda, is a start-up business advisor in a local bank. She has offered to become his partner. She knows plenty of people who would use their business. She has already found rent-free premises for the office. Alehandro is not sure whether it would be better for him to set up as a sole trader, in partnership with his sister, or as a limited company.

If Alehandro were to start off as a sole trader, he would be the only owner of the accountancy business. This would mean that he would be in full control of the business; he wouldn’t have to consult or check with others before making decisions and he would be able to decide
This is because, since his sister is experienced in the field of working with start-ups, she could give him guidance and assistance that he most probably would find very useful. Also, since she works in a local bank, she may be able to help with potential loans from the bank. Furthermore, given that Miranda has already found rent-free locations, by partnering up with her he would be very likely to set up his accountancy firm without having to pay any rent. Moreover, since there would be two people investing capital into the business, expansion of the business (later on) would be much more likely to be achieved. In addition, since Alehandro specializes in accountancy and Miranda specializes in giving guidance to start-ups and also has many connections, they can share the responsibilities of operating the business. By being in a partnership, Alehandro is more probable to getting more ideas from discussing matters with his sister. Although, there are many tempting advantages to being in a partnership, there are also a number of disadvantages that should be considered before making any decisions. For example, since this partnership would be an unincorporated business, which means that the owners don’t have a separate legal identity to their business, if the business were in debt and Alehandro and his sister weren’t able to pay back, all their assets including their own property, would be sold
One huge advantage that Alehandro would have is he would have limited liability. This would mean that if the company had many debts, the shareholders would only be responsible for the amount that they initially invested into the business. This means, if Alehandro were to have shareholders in his business, he would only be responsible for the amount of capital that he would’ve invested into the business. However, by becoming a private limited company, Alehandro would have to send a copy of the accounts of the business to the Registrar of companies, which means that the accounts of the business would be available to anyone. This may lead to an increase in the number of competitors the business would have. Another disadvantage of becoming a private limited company is that the business cannot sell shares to the public, which as a result is a limitation to save up a lot of capital, to then invest back into the business. Whereas if Alehandro were to set up as a public limited company, he would be running an incorporated business(just like a private limited company), which means his business would have a separate legal unit from the owners (which are Alehandro and the shareholders). This would mean that the company would continue to exist even if one of the owners died (unlike a sole trader or a partnership). Also, having a public limited company would mean that the financial records of the