Forms of Businesses

Forms of business organisations

Sole Trader

Partnership

Company

Advantages & Disadvantages of forms of business organisations

Liability

Dissolution

Private & Public Companies

When must public and private companies hold an annual general meeting (AGM):

A public company must hold an annual general meeting (AGM). Under s336 CA 2006 the AGM of a public company must be held in each period of 6 months beginning with the day following its accounting reference date. If the company changes its accounting reference date by giving the appropriate notice, the company must hold its AGM within 3 months of giving that notice. A private company is exempt from holding an AGM as s336 only applies to public companies.

Company Limited by Shares: A company limited by shares is the most common registered company. The liabilities of shareholders are limited to the amount, if any upaid on the shares held by them: s 3(2) of the CA 2006. A company limited by shares enjoys a separate legal entity so that the company’s debts are its debts not those of its members.

Company Limited by Guarantee: A company limited by guarantee. They have members rather than shareholders whose liability is limited to the amount that they have guaranteed to contribute to the company’s assets in the event of winding up. See s3(3) CA 2006. They are not suitable for commercial, profit making trading ventures and are found mainly in the not-for-profit sector, such as clubs, societies and charities, and to carry out semi-official functions, particularly in the field of regulation of the financial services market. Such companies also enjoy the advantage of separate legal personality.

Procedures of setting up a private company:

S 7 of the CA 2006 states that one person can incorporate, provided it is for a lawful purpose. The following documents must be sent to Companies House: a memorandum of association, the articles of association, signed by the subscriber(s), a statement naming the...