Business Law Essay Example | Topics and Well Written Essays - 1500 words - 29

Business Law - Essay Example t as a separate legal entity, no legal requirements govern its formation, and owners have unlimited liability and equal decision making rights, unless specified (Miller 2012, p. 496). Limited partnership requires submission of certificate of limited partnership, acquisition of a charter for business operations, and a general partner and a limited partner while a limited liability partnership requires submission of a qualification for limited liability status (City Law School 2008, p. 31, 32). These identify such advantages as shared losses and pooled resources, and disadvantages such as long decision-making process, shared profits, unlimited liability, termination against a partner’s wish, and financial risk due to limited capital base (Mann and Roberts 2013, p. 678, 679). Agreement among owners, issuance of a charter, and submission of legal documents subject to Companies’ Act 2006 (Appendix 1) form a limited liability company (City Law School 2008, p. 23). It is a separate entity, as the case of Salomon v A Salomon & Co Ltd illustrates (McLaughlin 2015, p. 82). Limited liability and veil of corporation are some of the legal consequences of incorporation (Appendix 2) and transferable share capital and debentures are sources of capital. It therefore enjoys such advantages as wider capital base, expertise management, sustainability, transparency availability of accounts for inspections, and limited liability, but disadvantages such as slow decision managing and possible lost authority over the business. The doctrine of corporate veil governs operations of a limited liability company. It provides that liabilities are limited to the entity and shareholders and corporate members are lot liable for any right or duty of the entity, unless factors to piercing of the veil exist, subject to the case of Woolfson v Strathclyde Regional Council [1978] SC (HL) 90 (Dignam and Hicks 2011, p. 116). A private limited company can however not sell its shares to the public for