Business Structures: Partnership vs. Company - LAWS20059 Report, 2020

This report analyzes the key differences between partnership and company business structures, focusing on costs, administrative burdens, potential liabilities to third parties, and fiduciary duties. It addresses a scenario involving three family members, Greta, Mariana, and Ted, who are considering starting a business. The report evaluates the advantages and disadvantages of each structure, highlighting the ease of establishment and lower costs associated with partnerships compared to companies. It also examines the implications of liability, with partners bearing unlimited liability versus the limited liability offered by companies. The report further explores fiduciary duties, emphasizing the higher number of duties imposed on company directors. Ultimately, the report concludes that a partnership structure is the most suitable option for the family, considering their specific needs and concerns, while also acknowledging other factors such as fund availability and reporting requirements.