Chapter 28 - Business Associations

Abstract

There are several different ways in which a pharmacist may operate when setting up a business. He may set up either as a sole trader, in partnership with some other party as a limited liability partnership, or as a corporate body. Each manner of operation has certain advantages and disadvantages. Partnerships are comparatively common and so require considerably more explanation. A partnership arises where two or more persons carry out a business in common with a view to making a profit. A partnership is called a firm, but the partnership has no legal entity of its own and the liability of the partners is personal. The major disadvantage of partnership is the unlimited liability of members. The creation of a limited company avoids this problem and is far more attractive to those wishing to set up a business that is going to incur any level of indebtedness or in which extensive commercial risks will be taken. There are three types of limited companies, the most significant of which—for present purposes—is the private limited company. The others are the public limited company and the company limited by guarantee.