Answer to the Question no: B

In issue of problems, Whether, Is incorporating a business into a limited company beneficial to

traders? Another factor to consider when deciding whether or not to incorporate as a company is
the cost involved.

Whether or not the expense and complexity incurred by a company as opposed to a partnership
relates to the company's accounts.

In general, the Company Law of 1994 establishes that a company is subject to statutorily
mandated rules and regulations governing its operation and management.

A company must be registered, which incurs fees. There will be legal fees payable to the solicitor
who drafts the new company's memorandum and articles of association (together, the company's
constitutional documents), which are essential and outline the company's aims, methods, and
rules of business life.

A corporation must be registered, which comes with its own set of fees. There will be legal
expenses payable to the solicitor who drafts the new company's memorandum and articles of
association (collectively, the company's constitutional documents), which are crucial and lay out
the company's goals, processes, and rules.

In analyses, Tom, Dick and Harry, assuming as directors and become shareholders will only be
liable for the amount of unpaid shares in the company if the company were to become insolvent
or even bankrupt. They can choose the amount willing to pay into the company which does not
have to be paid up front and would be liable should the company ever be wound up. This can be
contrasted with the situation under a partnership where the partners would be both jointly and
severally liable for the entire value of their trading losses.

The limited liability associated with the company. As business is good for Tom, Dick and Harry
at the moment, however, this would not appear to be an immediate problem. An important
consideration to take into account is the flexibility of a company to change its internal structure if
and when circumstances require it. Such a change would normally involve and require an
alteration to the company’s articles of association. A company is seen as a separate legal person,
which means it can contract and be held liable in its own name. This has ramifications for the
liability of the directors, and is generally seen as a benefit of a company. Only a company (and
not a partnership) can create floating charges over their assets. This is significant when it comes
to raising finance by way of granting security. It will probably be easier for a company to raise
the requisite finance than for a partnership to do so. It is also significant (or may be) that an
unlimited number of people can become members of a company, whereas a partnership is limited
to twenty partners. If and when the company grows and develops, it will be in its interests to be
unlimited in the number of new members it can obtain.

Finally, the legal status of a company differs significantly from that of a partnership. A company
is seen as a separate legal person, which means it can contract and be held liable in its own name.
This has ramifications for the liability of the directors, and is generally seen as a benefit of a
company. Only a company (and not a partnership) can create floating charges over their assets.
This is significant when it comes to raising finance by way of granting security. It will probably
be easier for a company to raise the requisite finance than for a partnership to do so. It is also
significant (or may be) that an unlimited number of people can become members of a company,
whereas a partnership is limited to twenty partners. If and when the company grows and
develops, it will be in its interests to be unlimited in the number of new members it can obtain.

In conclusion, ramifications for the liability of the directors, and is generally seen as a benefit of
a company. It can create floating charges over their assets. The significant when it comes to
raising finance by way of granting security. It will probably be easier for a company to raise the
requisite finance than for a partnership to do so.