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Organ Is at Ion

This document provides information on setting up a business as either a limited company or partnership. It discusses the key types of companies and partnerships, and outlines some of their main advantages and disadvantages. A limited company has a separate legal identity from its shareholders, offers liability protection, and continuity over time. However, it also has higher costs, more complex accounting, and potential shareholder conflicts. A partnership allows for more funding sources and specialized skills, but profits and control must be shared, and general partners carry unlimited liability. The document provides an overview of important considerations for business structure.

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53 views9 pages

Organ Is at Ion

This document provides information on setting up a business as either a limited company or partnership. It discusses the key types of companies and partnerships, and outlines some of their main advantages and disadvantages. A limited company has a separate legal identity from its shareholders, offers liability protection, and continuity over time. However, it also has higher costs, more complex accounting, and potential shareholder conflicts. A partnership allows for more funding sources and specialized skills, but profits and control must be shared, and general partners carry unlimited liability. The document provides an overview of important considerations for business structure.

Uploaded by

candidmurel
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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HELP AND ADVICE FOR BUSINESS SET UP FOR{FHABS LTD}

Organisation : This is a social arrangement for the controlled performance of a collective goal {Buchanan and Huczynski} synergy : These means that what one person can do for years two or more people can do it in a day { 2+2 = 4} companies and partnership are seen as a profit seeking organisation because their objective is to make profit

COMPANY AND TYPES A company consist of two or more people, incorporated as a registered company, who become its shareholder and who appoint directors to manage the company and act as it agent. TYPES: Limited company {Ltd} Public limited company {plc}

Public limited company: These are organisation that offer shares to the public at large through the medium of the stock exchange Limited company: These are organisation that do not offer its shares to the general public company cannot commence business until these formalities are completed. These include: A certificate of incorporation from the registrar of the companies Compliance with the companies act 1985 The business name act 1985

Advantages of a limited company Separate legal entity: A limited company has a legal existence separate from management and its member (shareholder) Members liability is limited: The protection given by limited liability is perhaps the most important advantages of incorporation, members only loss the value of the shares and any loan made to the company

continuity : A company has everlasting life, directors, management and employee act as agent of the company. If they leave, retire or die the company still remain in existence.

Taxation : sole trader and partnership pay income tax while company pay corporation tax on taxable profit.

Disadvantages of a company
Cost : The limited company is more expensive to set up Complex account: Their account is more complex and restrictive to it rule. Restrictive capital raising: for private limited companies, there is a restriction on the raising of capital through sales of shares. Conflict: potential friction as share holders are involve in the decision making process.

PARTNERSHIP
A business that is co-owned by two or more people is referred to as partnership. The co-owner of the business are called partners. Types General partners Limited partners General partners: These consist of two or more partners that have unlimited liability. That is, the partners are personally liable for all obligation of the firm. Limited partners: These partners liability is limited to the cash or property they contribute to the partnership.

Advantages Additional funding: more partners are there to finance the business operation. losses are shared: Any business losses the partnership incurs are spread across all of the partners. more specialisation: with a partnership, partners can focus on their respective specialisation and serve a wild verity of customers.

Disadvantages

Share of profit: Any profit that the partnership generate must be shared among all partners Unlimited liability: General partners in partnership are subject to unlimited liability. control is shared: The decision making in partnership must be shared, if the partner disagreed about how the business should be run, business and personal relationship may be destroyed.

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