This chapter explains the various commercial and legal justifications that gave rise to the creation of Limited Liability Partnerships (LLPs), and gives an overview of similar bodies in different jurisdictions. It explains the legislative scheme by which LLPs were introduced, and how the provisions of company law have been applied.
Chapter
10. LLPs: An Introduction
Chapter
9. Company law I: trading structures and forming the business
Each Concentrate revision guide is packed with essential information, key cases, revision tips, exam Q&As, and more. Concentrates show you what to expect in a law exam, what examiners are looking for, and how to achieve extra marks. This chapter reviews the law on business organization and business formation. The five main types of business organization (trading structure) applicable in England and Wales are: sole trader; simple partnership; limited liability partnership; private limited company; and public limited company. Sole trader organizations are very flexible but expose the owner to unlimited liability for losses, whilst operating a limited company limits potential losses of the shareholders but is subject to external regulation. A partnership can be ‘simple’, ‘limited’, or a ‘limited liability partnership’. Private limited companies are not required to have a minimum share capital but public limited companies require a minimum of £50,000 allotted share capital on registration.
Chapter
7. Dissolution and Winding Up
This chapter details the various grounds for the dissolution of a solvent partnership, contractual, automatic and by court order, followed by the processes whereby either a full dissolution is effected by a winding up or on a technical dissolution a departing partner's share is ascertained The effects of the death or bankruptcy of a partner and the illegality of the partnership business are considered along with agreed dissolution grounds. The various grounds for a court order are then set out. The effects of the frustration, rescission or repudiation of the partnership agreement are detailed. Winding up by the partners or receivers is then set out including the application of the assets on a winding up. The valuation of a partner's share on leaving is considered followed by his or her share in the profits after the technical dissolution until payment. Finally, the distribution of assets on a final account, is set out.
Chapter
2. Establishing a Partnership
This chapter describes the various ways of establishing a partnership, either intentionally or otherwise, and who then within the firm is actually a partner as opposed to a creditor or employee/worker. The lack of formality involved is set out together with the existence of partnerships at will, i.e. those with no defined duration. Informal partnerships may arise by financial involvement such as sharing profits, contrasting partners and creditors. Partnership liability may also arise by a person representing themselves as a partner which is relied on by a third party. The chapter then discusses the interface between partners and employees and the current possibility that one person could be both, or more likely both a partner and a worker. Finally, it considers the status of salaried and fixed-share partners.
Chapter
18. Unincorporated business structures
This chapter examines the law governing unincorporated business structures (that is, those that do not have corporate personality), namely the sole proprietorship, and the partnership. It explains the concept of the two forms of sole proprietorship, namely the sole practitioner and the sole trader, and the processes by which a sole proprietorship is established, operated, and terminated. The chapter then discusses the three different forms of parternship, namely the ordinary partnership, the limited partnership, and the limited liability partnership (although the LLP is discussed in more detail in Chapter 19). The chapter discusses how to create a partnership, and looks at how the partnership is run, including a discussion of the partnership agreement. Finally, the chapter discusses the rules relating to the dissolution of the partnership.
Chapter
D. Other legal forms for business
This chapter discusses various general-purpose legal forms for carrying on business. It starts with the simplest form of all, sole proprietorship (or self-employment). Two or more persons carrying on a business or profession in common with a view of profit are in partnership, which has developed into the sophisticated form of the limited liability partnership. The rest of the chapter is devoted to the various lesser used forms of company which can be registered under the Companies Act 2006 (CA 2006). These are guarantee companies, unlimited companies and community interest companies. The chapter also discusses how re-registration can be used to transform various types of company into other types.
Chapter
D. Other legal forms for business
This chapter discusses various general-purpose legal forms for carrying on business. It starts with the simplest form of all, sole proprietorship (or self-employment). Two or more persons carrying on a business or profession in common with a view of profit are in partnership, which has developed into the sophisticated form of the limited liability partnership. The rest of the chapter is devoted to the various lesser used forms of company which can be registered under the Companies Act 2006 (CA 2006). These are guarantee companies, unlimited companies and community interest companies. The chapter also discusses how re-registration can be used to transform various types of company into other types.
Chapter
8. Partnerships and Insolvency
This chapter sets out in outline the impact of insolvency on partnerships, the insolvency being that of the firm, one or more of the partners or any combination of those possibilities. It deals in order with the winding up of an insolvent partnership only, the winding up of the insolvent firm with the concurrent bankruptcies of the partners, joint bankruptcy petitions against the partners and separate bankruptcy petitions against the partners. It distinguishes between the rights of partnership and individual creditors and deals with the disqualification of an insolvent partner from the management of a company. The chapter then details the application of the corporate insolvency procedures of voluntary arrangements and administration orders to partnerships.
Chapter
1. Partnerships and Partnership Law
This chapter describes the essential characteristics and consequences of a partnership and the derivation and development of partnership law in England and Wales under the Partnership Act 1890. It also covers the introduction of limited partnerships and contrasts both with LLPs; topics which are dealt with from chapter 9 onwards. It highlights the lack of legal personality, contrasting that with partnership law in Scotland, and the consequent problems of contemplated partnerships and continuity. Then it sets out the three essentials for a partnership to exist: a business, carried on in common, with a view of profit, contrasting partnerships with joint ventures. The chapter also considers the complications if there are corporate partners. Finally, it sets out the basic issues relating to jurisdiction for foreign partnerships.
Chapter
4. Partners and Outsiders
This chapter sets out the vicarious liability of partners for the various forms of partnership liability to third parties. The liability for contracts is based on the concepts of agency and the authority of the partner(s) making the contract, in particular the scope of the implied or usual authority of a partner to bind the other partners. The exception to the undisclosed principal rule is carefully examined. The vicarious liability for torts and crimes committed by a partner is examined, including the apparent paradox of the non-existent legal person of the firm being subject to prosecution. The liability for breaches of equitable liabilities relating to misapplications by a partner is synthesised, including knowing receipt and dishonest assistance in a breach of trust. Then the chapter considers the nature of such liabilities and finally, the effect of a change of partners on such liabilities on both the outgoing and incoming partners.
Chapter
1. Introduction
This introductory chapter provides an overview of the aims of company law and governance. Company law should hold companies and directors to account, be flexible enough to respond to novel and evolving practices, provide certainty, promote transparency, help to avoid misalignment of interests, promote corporate efficiency, and help avoid corporate disaster. The chapter then looks at other key important business structures. Other than companies, the principal business structures are the sole proprietorship, the partnership, and the limited liability partnership. A sole proprietorship is a sole individual carrying on some form of business activity on their own account. Meanwhile, two or more persons who wish to engage in business together can form an ordinary partnership. Finally, limited liability partnerships were created to provide suitable business structures for large, professional firms. In many respects, limited liability partnerships resemble companies.
Chapter
1. Introduction to company law
Titles in the Core Text series take the reader straight to the heart of the subject, providing focused, concise, and reliable guides for students at all levels. This chapter presents an overview of company law, first by considering the company’s place within the various forms of business organisation. To get some comparative perspective on the relative merits of each type of organisation, three criteria for judging them are discussed: whether the form of business organisation facilitates investment in the business, mitigates or minimises the risk involved in the business venture, and whether it provides a clear organisational structure. Using these criteria, three forms of business organisation are analysed: the sole trader, a partnership, or a registered company. The chapter also explains the importance of the memorandum as part of the company’s constitution, as well as the distinction between private companies and public companies. Finally, it outlines the benefits of forming a company as opposed to the sole trader or a partnership.
Chapter
18. Businesses and the business environment
Scott Slorach, Judith Embley, Peter Goodchild, and Catherine Shephard
This chapter discusses the following: the importance of commercial awareness; the main types of business structure, their organisation, and management; the different markets, sectors, and industries in which businesses operate, and the role of consumers within these markets; supply chains from business to consumer; and the impact of competition within different markets.
