Partnership and agency law
Business organisations
Unincorporated – no separate legal identity, debts and liabilities belong to
individuals who own and run the business.
Incorporated – created by legal process and is legal entity in its own right. The
organisation itself has responsibilities for its obligations and liabilities not
individual members, shareholders or directors. Some of its functions: entering
into contracts, employing staff and leasing property in its own name.
3 types of partnership:
A general partnership (GP)
A limited partnership (LP)
A limited liability partnership (LLP)
A GP is not a legal entity separate from its partners whereas both a LLP
and a LP are legal entities separate from their members.
Members of GP’s and LLP’s pay income tax on share of profits received
Ltds pay corporation tax.
GP’s can be created without formalities and financial details are private,
LLP’s and Ltd’s require registration of documents with companies house
and must file annual confirmation statements and accounts.
In LLPs and Ltds assets belong to the LLP/Ltd. In GP assets belong to the
partners jointly.
Partnerships
- Unincorporated, little legal formality
- Can exist either by written agreement, implied conduct or orally.
- Relation between partners is a contractual one.
- Partners personally liable for any debts or liabilities. Each one for the
whole.
- Each partner agent of the firm’s business when dealing with third parties
the rules of agency apply.
- They must share profits.
Business organisations
Unincorporated – no separate legal identity, debts and liabilities belong to
individuals who own and run the business.
Incorporated – created by legal process and is legal entity in its own right. The
organisation itself has responsibilities for its obligations and liabilities not
individual members, shareholders or directors. Some of its functions: entering
into contracts, employing staff and leasing property in its own name.
3 types of partnership:
A general partnership (GP)
A limited partnership (LP)
A limited liability partnership (LLP)
A GP is not a legal entity separate from its partners whereas both a LLP
and a LP are legal entities separate from their members.
Members of GP’s and LLP’s pay income tax on share of profits received
Ltds pay corporation tax.
GP’s can be created without formalities and financial details are private,
LLP’s and Ltd’s require registration of documents with companies house
and must file annual confirmation statements and accounts.
In LLPs and Ltds assets belong to the LLP/Ltd. In GP assets belong to the
partners jointly.
Partnerships
- Unincorporated, little legal formality
- Can exist either by written agreement, implied conduct or orally.
- Relation between partners is a contractual one.
- Partners personally liable for any debts or liabilities. Each one for the
whole.
- Each partner agent of the firm’s business when dealing with third parties
the rules of agency apply.
- They must share profits.
