Legal Provisions Concerned with Business Units :: Business Management Companies Essays

Legal Provisions Concerned with Business UnitsOur client is in the process of forming a company. She wishes to avoid personalized liability upon any contracts she mayenter into on behalf of the proposed company. Our job is to design a report to explain the legal provisionsconcerned with the formation, management and separation of concernunits. The report will identify the relevant legal principles, which caninfluence the choice of business unit. Explain the differences in theregulatory approach follow for partnerships and registered companiesand quarter the procedures for the dissolution of business units.At the end of the report we will advise our client what type ofcompany would be best suited to her needs. at that place will also be apresentation to go with the report highlighting the main points.2.TYPES OF COMPANYThere atomic number 18 many an(prenominal) different types of business unit. Each is formed by agroup of people with a common aim. Britain has what is known as a mixed economy where goods and services are supplied by both privateand public domain organisations, as shown in the following diagram clandestine EnterpriseSole Trader Partnerships Limited Companies Co-operativesPrivate Public Retail ProducerPublic EnterprisePublic corporations Government Departments Local government activityThe private sector/enterprise is the term used to describe allbusinesses which are owned by individuals or groups of individuals andrun essentially for profit. About half of all trading in Britain iscontrolled by private sector organisations. The other half known asthe public sector/enterprise are businesses which are owned andcontrolled by the government or Local Authorities and run for thebenefit of the country. The sector this report is concerned with isthe Private Sector.2.1 SOLE TRADERThis is the oldest, simplest and therefore most common form ofbusiness unit. A repair trader is one who conducts their business bythemselves either using their own name or a business name. This issomebody who is self-employed and who usually starts a business withcapital from their savings or by borrowing from friends or a bank. Capital is the money which every business needs to enable it to direct upand operate, for example to buy premises, equipment, stock and paywages. The main advantage is that you can be flexible. You dontneed to discuss with others (e.g. partners and directors) how you are handout to run the business. You also have less paperwork. A soletrader is not necessarily a one-person business and may have manyemployees or branches. However, the business is owned by one personand it is they who receive the profits.ADVANTAGESDISADVANTAGES- Business affairs can be kept private except for complementary tax