2 - Business Structures

• A sole proprietor is an individual carrying on some form of business activity on their own account.
• If the sole proprietor is a professional, they are called a ‘sole practitioner’.
• If the sole proprietor is not a professional, they are called a ‘sole trader’.
• The three types of partnership are:

  1.        The ordinary partnership (known as general partnership)

  2.        The limited partnership

  3.        The limited liability partnership 
• The Partnership Act 1890 (PA1890) defines a partnership as ‘the relation which subsists between persons carrying on a business in common with a view of profit’.
• Each partner in an ordinary partnership is vicariously liable for the wrongful acts or omissions of another partner.
• In an LP, who has unlimited liability?

  General Partner
• In an LP, limited partners are not permitted to take part in the management of the firm
• Limited Liability Partnerships are governed by CA2006, unless the Limited Liability Partnerships Act (2000) states otherwise.
• The types of company that can be incorporated under CA2006 are:

  ·         A public company limited by shares

  ·         A private company limited by shares

  ·         A private company limited by guarantee

  ·         A private unlimited company with a share capital

  ·         A private unlimited company without a share capital
• A listed company is a company that has a class of its securities listed on the UK’s Official List
• A quoted company is a company whose share capital (i) has been included on the Official List; or (ii) is officially listed in an EEA state; or (iii) is admitted to dealing on the New York Stock Exchange or NASDAQ (CA 2006, s. 385(2)).
• A micro-entity must satisfy 2 of these 3 criteria: Turnover of no more than £623,000; Balance Sheet Total of no more than £316,000; and no more than 10 employees.
• A small company must satisfy 2 of these 3 criteria: Turnover of no more than £10.2 million; Balance Sheet Total of no more than £5.1 million ; and no more than 50 employees.
• A medium sized company must satisfy 2 of these 3 criteria: Turnover of no more than £36 million; Balance Sheet Total of no more than £18 million ; and no more than 250 employees.