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Partnership and Limited company businesses are more important business types of all over the world and then start a business, Mr.Fernando and Perera want to know which business type of suitable for their business.
The partnership is a good business structure in the business world. Then, Mr.Fernando and Perera would like to start a business in Colombo. That means, they want to create their business as a partner. On the other hand, partners want to share their profit and liabilities equally. Partnership types are a General partnership, Limited partnership, Joint venture, and Strategic Alliance. The general partnership means is a partnership in which all followers have a take full obligation and unlimited private liability for the management of the business. A limited partnership in which the partner’s liability is limited to their investments. Joint venture a
partnership in which two businesses joint to complete a specific project and the partnership ends after a specified period of time. Finally, a strategic alliance is a partnership in which two businesses work together for mutual benefits. Partnership depends on ownership two or more people, legal requirements, each partner must make a contribution to the partnership, partners are jointly and severally liable for debts on the business, and finally, the life of the partnership is not separate from the lives of the partner. When Mr. Fernando and Perera choose partnership business the can get more strengths. These are, they have few legal requirements, share profits and therefore motivated to work hard, a combination of new skills and ideas into a business and finally, they can share responsibilities for decision making. In the other side, partnership has a weaknesses. These are, problems can arise if one or more partners are lazy and inefficient or even dishonest, there another weakness is a not a separate legal entity and liable for the actions of the other partners, and finally, discussion between partners can slow down decision making and hard to find a suitable partner. These are the strengths and weaknesses of the partnership businesses.
Another business type is a Limited company. That means a company that issues shares. On the other hand, Mr. Fernando and Perera of which have the liability to contribute to the assets of the company, if any specified in the company’s article as attaching that to these shares. Then, the Limited company divided into Private Company, a public company, and Off-shore Company. They can start their business as a private or public limited company. But both companies have a difference. These are, a private company is required the minimum of two people and a public company is required minimum, seven people. Then, another difference is private company cannot trade share on the stock market and public company can trade share on the stock market and then the private company may operate different businesses and a public company is generally operate a business specific business. Then, a limited company has some strengths and weaknesses. The strengths are, easy and inexpensive to set up. Another strength is share can be sold to family members and death and illness will not affect the running of a business. Finally, no liabilities for shareholders. Then as a weakness for the limited company is profits have to be shared, and then accounts are not private, share cannot be sold on the stock market and finally not all decisions made by owners.
Mr. Fernando and Perera can create a business as a partnership or Limited company. As well as they can assuming both companies strengths and weaknesses before starting their business. Finally, they want to know which type of suitable for their business.
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