Business Law and Practice Lecture Trading Vehicles Sole Traders - most small businesses are sold traders, or they will start out this way. Most simple trading vehicle General Partnerships - definition of partnership is defined under PA 1890 s.1 - relation subsists between persons who carry out a business in common with a view to profit. Need a minimum of two partnerships. In a partnership agreement the partners agree on the terms of the partnership in accordance with the Partnership Act 1890 - example is the band called the Smiths. If you want to change the terns have to have agreement from all of the partners. Cannot affect the creditors. All partners are liable without limits for the death of the partnerships - have to trusts the partners in a partnership, if you don't then you may need to consider a different form of business medium. Limited Partnerships - beginning of the 20th century but they didn't take off very well - idea that there was one general partner and that partner would be liable for the partnership. Could have limited who could be investors who would limit their liability for the amount that they have invested into the business. Good for tax purposes. Limited liability Partnerships (LLPs) - like a company but they are like partnership for tax purposes which is generally a good thing. Companies e.g. - Public company limited by shares - have to be a public company to be listed on the stock exchange. - Private company limited by shares - separate legal personalities. Solomon v Solomon. Could lose investment when leaving the company however, doesn't lose personal properties. Limited liability whilst maintaining some management of the company. Participators - they are the shareholders or the members. Separation of management and ownership, shareholders who eventually own the company, they may also be the directors of the company. Share capital is the money which has been invested into the company when they invested their shares. Comes into existence with formation requirements (registrar of companies) have to open up the affairs to public scrutiny. - Constitutional documents: · Articles of Association or Model Articles . Pre 1 October 2009 - Other less common types Decision making - Decisions can be made by - directors; and/or shareholders Private company limited by shares - Company name - needs to end with the word Limited or Ltd. Everyone then recognises that it is a private limited company - No minimum share capital - commonly it is 100 shares but it could be less. No statutory restriction on the issued share capital of the company. - Shareholders will be the owners of the company - they will hold shareholder meetings and decisions - Maintenance of the share capital is less onerous than for PLCs.