Lecture 9 – Forms of business organisations
It is not just human beings who have legal rights and duties; the law permits the creation of artificial
or legal persons (corporations) that have a legal personality, separate from the members
Corporation – An office or organisation with its own legal personality distinct from
holder/members
All types of corporations have certain characteristics in common
o Creation by operation of law – Necessary legal process (charter, Act, or registration)
must take place to bring the corporation into existence. Once created, the
corporation will continue to exist unless or until the appropriate legal procedure
takes place to bring it to an end
o One or many members – Incorporation may create an office held by one person (a
corporation sole: One-member corporation), but most corporate bodies have at
least 2 members
o Its own legal personality – The corporation’s rights and duties are conferred by the
charter or law under which it was created. The company’s legal personality is distinct
from that of the company’s members. A change in membership does not affect the
existence of the company
o While company officers and employees may cause breeches of its contracts, or
commit torts or crimes in the execution of its policies, it is the company which is
legally liable for the wrongdoing
Control over business names
Legal and marketing imperatives in choosing a name for a business
Legal restrictions on choice of names
No name that is the same/similar to an existing business
o E.g., Fernandos for a chicken restaurant would be too similar to Nandos
Search for free at Companies House
Database of 4 million registered companies
Any punctuation in name will be ignored; The, www, & and company will be ignored
Two, 2 and to are all considered to be the same in a company name
Sometimes permitted registered names might break trademark protection
Coke Cola (2008) – Company Tribunal order under Companies Act 2006
Company Names Tribunal's first ruling: Coke Cola needs a new name (pinsentmasons.com)
Restricted and sensitive words
British, Institute, Tribunal – Require secretary state’s approval
Architect, Physiotherapist and other health care professionals – prohibited by governing
bodies
Name suggesting a connection with government or local authority
Offensive to the general public
Limited/Ltd, unless it is a limited company
Different forms of legal structure
Sole trader (business on someone’s own account)
Partnership (number of people come together to create a business)
Limited liability partnership (LLP) (Larger organisation)
It is not just human beings who have legal rights and duties; the law permits the creation of artificial
or legal persons (corporations) that have a legal personality, separate from the members
Corporation – An office or organisation with its own legal personality distinct from
holder/members
All types of corporations have certain characteristics in common
o Creation by operation of law – Necessary legal process (charter, Act, or registration)
must take place to bring the corporation into existence. Once created, the
corporation will continue to exist unless or until the appropriate legal procedure
takes place to bring it to an end
o One or many members – Incorporation may create an office held by one person (a
corporation sole: One-member corporation), but most corporate bodies have at
least 2 members
o Its own legal personality – The corporation’s rights and duties are conferred by the
charter or law under which it was created. The company’s legal personality is distinct
from that of the company’s members. A change in membership does not affect the
existence of the company
o While company officers and employees may cause breeches of its contracts, or
commit torts or crimes in the execution of its policies, it is the company which is
legally liable for the wrongdoing
Control over business names
Legal and marketing imperatives in choosing a name for a business
Legal restrictions on choice of names
No name that is the same/similar to an existing business
o E.g., Fernandos for a chicken restaurant would be too similar to Nandos
Search for free at Companies House
Database of 4 million registered companies
Any punctuation in name will be ignored; The, www, & and company will be ignored
Two, 2 and to are all considered to be the same in a company name
Sometimes permitted registered names might break trademark protection
Coke Cola (2008) – Company Tribunal order under Companies Act 2006
Company Names Tribunal's first ruling: Coke Cola needs a new name (pinsentmasons.com)
Restricted and sensitive words
British, Institute, Tribunal – Require secretary state’s approval
Architect, Physiotherapist and other health care professionals – prohibited by governing
bodies
Name suggesting a connection with government or local authority
Offensive to the general public
Limited/Ltd, unless it is a limited company
Different forms of legal structure
Sole trader (business on someone’s own account)
Partnership (number of people come together to create a business)
Limited liability partnership (LLP) (Larger organisation)
