Business organisations

Abstract

Solicitors are often required to give advice on which business forms are appropriate for a client’s needs. To advise on business forms, a knowledge of the key features of different business forms is essential. Of particular importance is a knowledge of important concepts such as limited liability and separate legal personality which are features of a number of business forms. These concepts, discussed in more detail in Chapter 2, can combine to enable businesspeople to protect themselves if the business fails by limiting their liability to the debts of the business and preventing creditors from suing for their personal assets. Despite these advantages, a limited liability organisation may still not be the most suitable. The appropriate business form will depend on factors such as the client’s attitude to risk and the nature, size, and complexity of the business. This chapter considers the types of business organisations that are listed in the curriculum of the Solicitors Qualifying Exam: Sole traders, ordinary partnerships, limited liability partnerships, private limited companies, and public limited companies.