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Legal Aspects of Business Organizations

   

Added on  2021-06-16

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Legal Aspects Of Business Organization 1LEGAL ASPECTS OF BUSINESS ORGANIZATIONSBy (Student’s Name)Professor’s Name College Course Date

Legal Aspects Of Business Organization 2LEGAL ASPECT OF BUSINESS ORGANISATIONIntroductionWhen starting a business entity, there are various considerations to make beforecommenting but there is one major consideration one has to observe which the legal aspects aresince they influence the company activities in the future. In this part of the evidence file, therewill be the most vital legal aspects for successively running the company. There is theassortment of business form. The forms of business organization are the Unlimited Partnershipand the Private Limited Company. Salient features discussed in broad. The question of how to make company successful has overstretched researchers andpeople in business for an extended period. An arrangement of commercial supremacy mustattack an appropriate equilibrium between authorizing entrepreneurship and adventuresome andthe defense of investors (Lim 2013). Corporate humiliations with the demise of businessbehemoths such as Enron and Parmalat display that the present system may slope the balance toomuch in service to the directors getting needless risk. Director rule measure in the UK through asequence of directors’ obligations confined in the Companies Act 2006. This work purposes tooutline in broad the justification for these duties, describe their realm and to critically measurethe benefits and drawbacks of the present UK approach concerning other authorities (Laster andZeberkiewicz 2014).Unlimited PartnershipAn unlimited partnership is a corporate body in the eyes of the laws. The UnitedKingdom has put laws that legalese this type of business organization to venture into commercialactivities. Partnership Act was passed in the year 1890 to give guidelines to those people who

Legal Aspects Of Business Organization 3would want to engage in partnership with the aim of doing business activities. (Act 2000 Section1)These are the main Characteristics of an unlimited partnership. IncorporationThe partnership requires two people for its formation. The unlimited partnership is a legalentity. Similarly, to all business entities, Unlimited Partnership has that aim to make a profit.Members joining the partnership are required to provide their names in incorporation document.The document must be inclusive of the name of the partnership, address, and the location of thepartnership, names, and addresses of the two members (Reiser 2010). The incorporation sent tothe registrar where all legal requirements are ensured, and upon approving that issuance of acertificate of incorporation. (Act 2000 Section 2, 3)MembershipFirst members are required to sign the document of corporation (Business law andcorporate UK) and signing the other members can come in the corporation by coming into termswith the founder members (Act 2000Section 4, 9). The membership of the members normallyceases to death. Rights and duties of members depending on the agreement and mutual consent.In case there is no agreement the member is governed by the unlimited partnershipRegulations 2001 (Corporate and Business Law UK).NameIn the incorporation document, unlimited Partnership name must be inclusive. The namemust end with "Unlimited Partnership."

Legal Aspects Of Business Organization 4Liability of Debts.In the Unlimited Partnership, the member's liability is limited according to the amountthe member contributed (Dunlop) if Unlimited Partnership liquidities and debts are incurred, themembers face restrictions on capital share given by the members (Marshall and Ramsay 2012).Capital contribution for the members is not specified to any amount for the creation of thepartnership. Members of this partnership have the rights to decision making for the amount ofcapital contribution. Additionally, the withdrawal of the member's contribution has no specifictime thus members can make the withdrawal at any time. Private Limited CompanyA private limited company is a legal entity which provides legal protection to theirshareholders and restricts them on ownership. The private limited company has three restrictionsin place that protects the shareholder's investments from takeover.Shareholders cannot transfer their shares or even selling them without giving an offer toother shareholders in the company who later approve the [transfer or the sales of the shares(Carson 2012). Shares cannot be offered to the general public by the shareholders on a stock exchange.The act is to protect the value of the company shares from the stock market association.The number of shareholders, usually restricted by the by-laws of the company. Thenumber of members to be in a Private Limited Company is limited to a maximum number offifty shareholders (Companies Act 2013). This restriction helps to avoid dilution of the companystock to many people as well as maintaining balance to the hostile takeover. Limitation of the

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