Economic Project

Contents

Introduction

Business Registration

~Meaning

~Registration Procedure for Sole Proprietorship and Partnership

~Registration Procedure for Limited Company

~Registration Procedure for Overseas Company

~Registration Fee and Levy

~Payment Methods

~Cancellation

Sole Proprietorship

~Definition

~Popularity

~Set-up process

~Advantages

~Disadvantages

~Reason of suitable for Small Business

~Examples

Partnership

~Definition

~Features

~Forms/Establish

~Liability

~General partnership

~Limited partnership

~Advantages

~Disadvantages

~Tax rate

~Dissolution and Termination

Limited Company

~Meaning

~Advantages

~Disadvantages

~Private limited companies

~Public limited companies

~Shares

~Procedures of Formation

~Taxes

Comparison

Conclusion

Working Table

Liability

  Partners are liable for the debts and obligations of the partnership without limit. Their liability is joint and several in the case of contractual obligations and joint and several in the case of tortuous obligations. Where a partnership is unable to pay its debts out of partnership property, the creditor is entitled to obtain payment from the private estates of the partners. Special rules apply in such cases, so as to attempt to do justice both to the creditors of the firm and to the creditors of the individual partners. They may be summarized by saying that, in the first instance, the partnership property is used to pay partnership creditor in priority to private creditors and the private property of each partner is used to pay his private creditors in priority to partnership creditors. If the private creditors of a particular partner are paid in full from private property, then partnership creditors may resort to the balance of that partner’s private property. Of the partnership creditors are paid in full from partnership property then the private creditors of a partner may resort to the balance of his share of the partnership assets.1

  In general partnership, a general partner has unlimited legal liability. His or her personal assets are at risk. General partners are personally liable for all business debts and liabilities, such as Business loans, performance of contracts, personal injury, and property damage. General partners have joint and several liabilities. This means that the partners are jointly and individually responsible for the entire liability. Someone with a claim against the partnership may sue one partner or all of them. If you pay more than your share of a liability, you may recover the excess from your partners. Partners are liable for the business acts of other partners. You should choose your partners carefully. If the partnership goes bankrupt, your personal assets will be involved in the bankruptcy. When you die, your estate will be responsible for paying off your share of partnership debts and liabilities.2

  In Limited Partnership, a general partner has unlimited legal liability. His or her personal assets are at risk. The general partner or partners are personally liable for business debts and liabilities. A limited partner's liability is limited to the extent of his or her investment in the business. A limited partner is not personally liable for business debts and liabilities. If you are a limited partner only the assets you have invested in the business are at risk, except you are personally liable for any loans or debts you personally guarantee or you may become personally liable for all debts and liabilities if you exercise management rights.3

1 Business Law – Anthony King & John Barlow

   Blackstone Press Limited (1993) P.15

2 http://www.ces.ncsu.edu/depts/fcs/business/gps.html#Liability

3 http://www.ces.ncsu.edu/depts/fcs/business/lps.html

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