LLB COMPANY LAW COURSEWORK QUESTION 2009-2010 UK

LLB Company Law Coursework Question 2009-2010 UK Law)

LLB Company Law Coursework Question 2009-2010 UK Law)

Task 1

With regard to the scenario it's important for Lizzy to know that an LLP is a separate legal entity just like a private limited liability company. It is recognised by law, which accords different rights and duties to those in business. There are four main legal forms of business ownership in the private sector: 1) Sole trader 2) Partnership 3) Private limited companies Limited Companies 4) Public limited companies.

There are a number of  legal formats for establishing a business. However, in the simplest terms there are only two formats: Incorporated and Unincorporated. In the case of an unincorporated business, you as a person are the business. It's like having a separate bank account which you use for the transactions of your business. All you have to do is to "hang out your shingle", i.e. come up with a business name (or simply use your personal name), register it with your local government (to get tax numbers and any necessary business licenses) and start working on getting customers. Usually this form of business is referred to as a Sole Proprietorship. It is the simplest and least expensive format. Te owner, receives ll the profits and takes and accepts all the risks personally. Limited Partnerships may be formed when several people wish to invest in a business but do not necessarily want to run or manage (or take on risks associated with) the business. In this case, limited partners are liable for debts only to the extent of their original contributions of capital. In terms of what one need to do, i.e. licenses, tax numbers, name registrations, etc. - the best bet is to check with a business advisory service (e.g. a law firm, government office, etc.) because the requirements will depend on the business and perhaps what kind of business it is. Requirements will vary from city to city and province (or state) to province (or state).(Walmesley, K 2002 Pp. 340-346)

Often, professional firms (law firms, accounting firms) are set up as partnerships but with a special form of partnership limiting the liability (known as an LLP) of the partners

Benefits of incorporating

personal liability protection (to a large degree)

substantial tax advantages  (especially when you sell a business)

a high degree of flexibility in personal financial planning

greater control in transferring ownership

easier to bring in outside investors and other partners

a company survives human death (i.e. may last indefinitely)

Most voluntary groups begin as unincorporated organisations, and may stay that way, particularly if they are small. A group of people can form one easily, without any special formalities. They simply decide for themselves how to run it. In practice, it is worth agreeing some basic rules and writing these down, so that everyone is clear about the aims for the organisation and how it will be managed. The law looks on an unincorporated organisation as a collection of ...