Legal Report on How to Start a Business

Aim: To provide three trustees with a successful legal report in order to start a business.

Introduction

For this report I am going to advise David Notla, Cote D’ablo and Abbey Childwall on the most suitable business model for setting up a formal business venture utilising the artistic talents and sensibilities of their more committed and long standing service users. The report will be divided into different subheadings; firstly stating clearly the legal requirements needed, secondly the advice I’m offering and thirdly the common law standards. This will allow the reader to go directly to the advice on the relevant point. After reading through the brief I felt it most appropriate to make this business a private limited company ‘Ltd’. A private company raises its capital from private arrangements (Davis, 2010), which has already been done between the three trustees this will endorse all three of the trustees’ requirements and desires while being the appropriate legally (as it allows personal protections and liabilities).

By forming a private limited company Notla, D’ablo and Childwall will be the directors of the company, each ‘service user’ can become a shareholder by buying shares in the company, allowing them to have participation in ownership.

Part 1

Business models

Type Advantages Disadvantages

Partnership • As there is three trustees setting up the organisation this means there will be more capital

• In a partnership all three trustees may each have different skills.

• There is more people to make bigger decisions easier

• As this organisation wants limited liability, ordinary partnership is not suitable for them as it does not offer limited liability.

Limited Partnership • If one of the three trustees were to opt out it can be easier to attract investors.

• Partners are covered by the Limited Partnership Act 1907 (Morse, 2010). It is essential that this model is registered with the Registrar of the Companies it cannot start trading...