Unincorporated Organizations And Business Law

Running head: BUSINESS LAW
BUSINESS LAW
Name of the Student
Name of the University
Author Note

BUSINESS LAW1
Question 1
a) Unincorporated organizations are regarded as businesses that does not have any distinct
legal existence from the owners.
Advantages
 Economical and easy to form.
 Minimal requisites for registration.
 Minimal capital.
 Easy dissolution.
 Profits are for proprietor only.
 Simple filing necessities and paperwork.
 Direct control regarding the decisions of the business.
Disadvantages
 Must assume every risk in relation to the business, that is, unlimited liability.
 Shall be responsible regarding the payment of the debts of business.
 There shall be no distinction between the personal assets and the business.
Creditors may seize the private assets.
 Probable tax disadvantages when the profits results in higher tax bracket.
b) Commencing an incorporated business shall have several advantages as well as certain
disadvantages. A business may be incorporated as per the Companies Act of the year
2006. Insolvency Act of the year 1986 may also be considered to be a pertinent statute in
this regard. They are as follows:-

BUSINESS LAW2
Advantages
 The liability regarding the shareholders shall be restricted to nominal value in
relation to the shares owned by them, when the company is going to be wound up.
 Much easier to sell the shares.
 Much easier to acquire finance for capital purchases, and much easier to acquire
additional borrowing amenities.
 Provisions relating to pension can be flexible or beneficial regarding an
organization.
Disadvantages
 There may be personal guarantees and liability shall not be restricted in that
matter.
 Formation of the company can be very expensive and also time consuming.
 There shall be huge costs in relation to the accountants.
c) The LLP shall not be considered to be a corporation or a company or a legal body. The
LLP of the United Kingdom is regarded as a ‘Limited Liability Partnership’ that is
considered to be an amalgamation of a classic partnership in relation to a Limited
Liability Company, which is generally established with the help of an LLP Agreement in
a written form, which stipulates in relation to the formation and operations. The LLP
businesses are governed by the Limited Liability Partnerships Act of the year 2000.
The members of an LLP of United Kingdom have a shared obligation as agreed
upon in the ‘LLP agreement’, however, there shall be no separate accountability in
relation to the actions of each other. The members relating to an LLP shall have an
obligation or responsibility of care towards the organization. In case of absolute control