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Topic 2 - Legal Aspects of Business Organisations (Student)
Topic 2 - Legal Aspects of Business Organisations (Student)
BUSINESS LAW
(ALW10103/BLW10103)
Topic 2
Differences
Types of business between types of
organisations business
organisations
Introduction
Types of
business
Sole
proprietorshi Partnership Company
p
Which one?
Procedure
required
Taxation Liability
Transferabilit
y Continuity
Sole Proprietorship
• One person.
• Fully responsible.
• No hassle legal process.
• But must register under
Reg. of Buss. Act 1956.
• Own the asset and capital.
• Has unrestricted
borrowing power.
• Unlimited liability.
Termination/Dissolution of Sole
Proprietorship
Partnership
Section 3(1) PA
• The RELATIONSHIP
that subsists
between PERSONS
carrying on
BUSINESS IN
COMMON with a
VIEW OF PROFIT.
Nature of Partnership
Must be •
Include every trade,
carrying on occupation or profession.
a business
The business
must be • Possessed a COMMON INTENTION
carried on in to carry on the business.
common
The business
• Must be carried on with a PROFIT
must be
MOTIVE.
carried on • Not a non-profit oriented
with a view of businesses.
profit
Number of Members
• Max. 20.
• professional partnership – NO MAX.
Constitution
• A partnership may be formed orally or in
writing – AN AGREEMENT.
Relationship between Partners Inter Se
No
agreement Agreement
S.26 of PA
Conditions
Contractual Criminal
Holding out
Contractual
• Sec. 11 – all partners liable.
• May sue and be sued individually or the whole firm.
Criminal
Holding out
Section 37.
• An incorporated
company can take legal
action against a party as
well as assume full
liability in its own name.
Classification of Company
Company
Public Private
By
By share By share
guarantee
Private Company
Prohibits any
invitation to the
public to subscribe
for any shares
Public Company
Special Feature of Company –
Separate Legal Entity
Shall be a BODY
CORPORATE: