Tutorial 1 - Business Vehicles in Europe
- Sole trader (eenmanszaak)
- General (commercial) partnership (VOF)
- Limited partnership (CV)
- Public limited company (Naamloze Vennootschap)
- Private limited company (Besloten Vennootschap)
Innovative companies go broke because they are the first, the ones to take the risk. They are
simply too innovative. Limited liability follows often from legal personality, but not always. For
example, it is possible that partnerships are without legal personality but with full joint and
severe liability.
Portfolio investment (highly important) when banks try people to invest (and loose) their
money.
Transferability of shares varies depending on whether it is private or public company. Private
has transfer restrictions unless otherwise provided in the statutes. For public companies
there is no transfer restriction unless otherwise provided in the statues.
Advantage of transferable shares: portfolio invesment, increase flexibility of capital, delegate
management with board structure,
Civil law systems: separate board structure, supervisory board and management board,
grave mistakes (wanbeleid). Being member of 28 supervisory boards where they meet once
a year, accept bonuses and leave again. Maybe it is better to have a system with a single
board where they have meetings regularly, this is a real job.
In the end it is not the board structure that counts, but individual capacity.
Q1.1 Describe the main characteristics of partnerships (take into consideration that certain
characteristics, e.g. joint and several liability of partners, may vary depending on different
types of partnerships existing under national laws).
Partnerships are closed through a contract, between two or more persons, in order to
achieve a certain goal. There is a community of goods, which means that the assets belong
to the partners as a whole. The partners are jointly and severally liable and they contribute in
cash, services, know how or labour. There is a lot of organizational freedom, not mandatory
EU rules. SME are usually partnerships with full liability (the shops around the corner, family
shops). Example of a partnership that is huge: C&A. Why would they still opt for a
partnership? Because the general persons remain liable if things go wrong. They want to
keep control and keep the institute personae, strategy of the company. They are free not to
publish anything about their financial state
Q1.2 Describe the main characteristics of limited liability companies.
(Limited liability) companies exist in the form of private and public companies. Companies
have legal personality, llimited liability, fully, but not freely transferable shares. Their
management is delegated under a dual board structure and ownership and control are
separated. Investors gain a small piece of ownership which gives them the right to vote as
well as the right to receive the company’s net earnings.
Private companies do not require public funding through capital markets.
Public companies are usually large enterprises in which shareholders have no managing
power and provide for a free transferability of shares.
- Sole trader (eenmanszaak)
- General (commercial) partnership (VOF)
- Limited partnership (CV)
- Public limited company (Naamloze Vennootschap)
- Private limited company (Besloten Vennootschap)
Innovative companies go broke because they are the first, the ones to take the risk. They are
simply too innovative. Limited liability follows often from legal personality, but not always. For
example, it is possible that partnerships are without legal personality but with full joint and
severe liability.
Portfolio investment (highly important) when banks try people to invest (and loose) their
money.
Transferability of shares varies depending on whether it is private or public company. Private
has transfer restrictions unless otherwise provided in the statutes. For public companies
there is no transfer restriction unless otherwise provided in the statues.
Advantage of transferable shares: portfolio invesment, increase flexibility of capital, delegate
management with board structure,
Civil law systems: separate board structure, supervisory board and management board,
grave mistakes (wanbeleid). Being member of 28 supervisory boards where they meet once
a year, accept bonuses and leave again. Maybe it is better to have a system with a single
board where they have meetings regularly, this is a real job.
In the end it is not the board structure that counts, but individual capacity.
Q1.1 Describe the main characteristics of partnerships (take into consideration that certain
characteristics, e.g. joint and several liability of partners, may vary depending on different
types of partnerships existing under national laws).
Partnerships are closed through a contract, between two or more persons, in order to
achieve a certain goal. There is a community of goods, which means that the assets belong
to the partners as a whole. The partners are jointly and severally liable and they contribute in
cash, services, know how or labour. There is a lot of organizational freedom, not mandatory
EU rules. SME are usually partnerships with full liability (the shops around the corner, family
shops). Example of a partnership that is huge: C&A. Why would they still opt for a
partnership? Because the general persons remain liable if things go wrong. They want to
keep control and keep the institute personae, strategy of the company. They are free not to
publish anything about their financial state
Q1.2 Describe the main characteristics of limited liability companies.
(Limited liability) companies exist in the form of private and public companies. Companies
have legal personality, llimited liability, fully, but not freely transferable shares. Their
management is delegated under a dual board structure and ownership and control are
separated. Investors gain a small piece of ownership which gives them the right to vote as
well as the right to receive the company’s net earnings.
Private companies do not require public funding through capital markets.
Public companies are usually large enterprises in which shareholders have no managing
power and provide for a free transferability of shares.
