Different types of company
BUSINESS LAW
COURSEWORK ASSIGNMENT: 2013-2014
Craig Shaw
Contents
1. Introduction
2. Company vs Partnership
2.1 Benefits of adopting a company
3. Types of company
4. Shareholding model
5. Starting the company
6. The Articles of Association
7. Conclusion and recommendations
1. Introduction
As an employee of a management consultancy specialising in starting up business ventures, I have been approached by 3 graduates wish to develop an idea into a business venture. This report aims to give advice to the graduates on the business vehicle they should set up, as well as shed light and elaborate on certain key areas, providing recommendations and justification where appropriate.
2. Company vs Partnership
There are various differences between a company and a partnership. It is important to recognise these differences before determining which business type to pick when starting a new business.
One of the differences between a company and a partnership is legal entity. A company is considered a separate legal person, and enters into contracts through its directors or other employees. Directors manage the day to day running of the business and are responsible for various operational decisions. Decisions regarding the running of the business are normally made by shareholders, for example the appointment of directors.
A partnership is comprised of individuals who have joint authority; and each partner can enter the partnership into binding agreements. The partners have a shared responsibility for tax and all other debts. The partners may form an agreement to divide tasks, responsibility and liability. A partner isn’t an employee of the business, together they may hire employees.
When referring to a public or private limited company, the word limited refers to the limited liability of the company's debts among its shareholders. In a partnership, each partner has personal and joint liability for all debts incurred by the business, as well as the actions of their
COURSEWORK ASSIGNMENT: 2013-2014
Craig Shaw
Contents
1. Introduction
2. Company vs Partnership
2.1 Benefits of adopting a company
3. Types of company
4. Shareholding model
5. Starting the company
6. The Articles of Association
7. Conclusion and recommendations
1. Introduction
As an employee of a management consultancy specialising in starting up business ventures, I have been approached by 3 graduates wish to develop an idea into a business venture. This report aims to give advice to the graduates on the business vehicle they should set up, as well as shed light and elaborate on certain key areas, providing recommendations and justification where appropriate.
2. Company vs Partnership
There are various differences between a company and a partnership. It is important to recognise these differences before determining which business type to pick when starting a new business.
One of the differences between a company and a partnership is legal entity. A company is considered a separate legal person, and enters into contracts through its directors or other employees. Directors manage the day to day running of the business and are responsible for various operational decisions. Decisions regarding the running of the business are normally made by shareholders, for example the appointment of directors.
A partnership is comprised of individuals who have joint authority; and each partner can enter the partnership into binding agreements. The partners have a shared responsibility for tax and all other debts. The partners may form an agreement to divide tasks, responsibility and liability. A partner isn’t an employee of the business, together they may hire employees.
When referring to a public or private limited company, the word limited refers to the limited liability of the company's debts among its shareholders. In a partnership, each partner has personal and joint liability for all debts incurred by the business, as well as the actions of their