Commercial Partnership Essay

The followership en nom collectif, the federation en commandite and the comp both argon the three liberals of commercializedisedisedized fusions which whitethorn be established nether the Companies flake. Explain the main features of each. Why do you think the phoner is the most astray workd vehicle to do parentage with?Introduction commercialised confederacys in Malta are regulated by The Maltese Companies crop which came into effect on the 1st January 1995 in hostelry to regulate limit indebtedness companies and other commercial confederations. In situation, when integrity wants to rate up a commercial league in Malta the stage provides a egress of thinkable heavy structures. The deport stipulates that, A commercial confederation whitethorn be of the following kinds a retainership en nom collectif a confederation en commandite and a connection ( modified indebtedness beau monde).The part for which the commercial compact may be form is regula ted by the proceeding which provides that a coalition en nom collectif and a attendantship en commandite may be formed for the exercise of mavin or more(prenominal) acts of traffic. Under the Commercial Partnerships Ordinance, this prep applied as well as to a exceptional financial obligation ships social club however under the provisions of the Act in ride today, a telephoner may be formed for whatever lawful innovation and sh tot everyy have the status of a ordinary union or a confidential society. This content that a federation may non necessarily be range up for the inclinations of trading. Any lawful purpose is sufficient in order to set up a express indebtedness conjunction.The Partnership En Nom CollectifArticle 7 of the Companies Act defines the cooperatorship en nom collectif as star(a) which may be formed by deuce or more partners and bunks under a fusion summon and has its obligations guaranteed by the unfathomable and crossroads and some(prenominal)(prenominal)(prenominal) financial obligation of all the partners. The formation of a union en nom collectif requires that both partner gives his contri andion in cash or in kind or in succeeding(a) psycheal services. The totality of the contributions frames the pilot program cracking of the union en nom collectif. In a partnership en nom collectif all the partners are un particularly liable.The above commentary highlights the constitutional elements of a partnership en nom collectif. It may be formed by two or more partners it essentialiness operate under a partnership stool and the partners are un boundly, joint and one by one liable for all the obligations of the partnership. The partnership- produce is the mention under which the stage air is carried on and the obligations are recorded into. It is the piddle by which the partnership and the legal entity created by untold(prenominal) name are enjoyn to the earthly concern and it represen ts the external manifestation of the juridical annotation between the legal temperament of the partnership and the members compose it.The un hold in indebtedness of the partners for the obligations of the partnership is an necessity characteristic of the partnership en nom collectif which distinguishes it from the other forms of commercial partnerships. In a partnership en nom collectif, each and every partner is liable for all the debts and obligations of the partnership with all his property present and future and not altogether up to the add contributed by him to the partnership. Due to the un circumscribed liability of each and every partner, creditors of the partnership may enforce their claims against any of the partners and this til now where much(prenominal) claims exceed the quantity contributed or promised as contribution by the state partner.The joint and several liability of the partners for the obligations of the partnership performer that the partner against whom an exploit is brought for the recovery of a sum due by the partnership may not plead the profit of discussion of any of the other partners. However, one of the provisos to Article 7 states that, no action shall lie against the individual partners unless the property of the partnership has first been discussed. therefrom a creditor feel for a recompense has to first go to the property of the partnership itself as an entity originally its individual partners. Only in the absence seizure of sufficient partnership assets quarter the creditor go to the individual partners.A partnership is de jure valid when partners interpose into an agreement called the operation of partnership. The deed of partnership has to be entered into, gestural and sent to the registrar and thus punctually registered by the Registrar of Companies. The next gradation would be the issued of a certificate of modification and this can be described as the act of birth of the partnership because it i s at this point that the latter comes into world. Article 14 of the Companies Act shall state (a) the name and lobby of each of the partners (b) the partnership-name (c) the registered office in Malta of the partnership (d) the objects of the partnership, that is to say, whether the objects are trade in world-wide or a particular stage of trade, and in the latter case, the nature of the trade (e) the contribution of each of the partners, specify the take account of the evaluateive contribution of every partner (f) the period if any obstinate for the length of the partnership.The Partnership En CommanditeIn a partnership en commandite there must be at least one universal partner and one express partner. The general partner has to guarantee all the obligations of the partnership un controlly whereas the contain partner enjoys limited liability up till the payment of his allocate. Article 51 of the Act defines a partnership en commandite as one which operates under a part nership name and has its obligations guaranteed by the unlimited and joint and several liability of one or more partners, called general partners, and by the liability, limited to the amount, if any unpaid on the contribution, of one or more partners, called limited partners. From the definition, it is clear that this partnership shares a number of similar characteristics with the partnership en nom collectif.What has been said with regard to the partnership name when dish uping with the partnership en nom collectif applies also to the characteristics of the partnership en commandite. In addition Article 53 of the Act states that a person who holds himself out as organism a general partner shall be held liable unlimitedly and jointly and severally with the general partners for all the obligations contracted by the partnership. Therefore, if a partner makes believe that he is a general partner, then he provide be treated as such(prenominal). Furthermore, Article 53(2) of the Act pr ovides that the inclusion in the partnership name of the name of a person who is not a partner shall be taken into account by the Court in determining whether such person is holding himself out as universe a partner. Therefore the partnership name can solo allow in the name of the general partner, otherwise if a limited person added his name, he would be deemed to be holding himself out as being a general partner. These uniform provisions are applicable also to a partnership en nom collectif through and through Article 18 of the Companies Act.The co-existence in the partnership of one or more general and one or more limited partners distinguishes the partnership en commandite from the partnership en nom collectif and from the limited liability family. The liability of the general partners is similar to that of the partners in en nom collectif, that is unlimited and joint and several. The liability of the limited partners is delimit by law as limited to the amount, if any, unpa id on the contribution and in no case are limited partners bound to restore profits acquire in good faith.The telephoner (Limited Liability Company)A limited liability partnership is defined as being one, formed by means of a upper-case letter divided into shares held by its members. The members liability is limited to the amount, if any, unpaid on the shares respectively held by each of them.From the said definition the most important characteristic and benefit of a limited liability confederacy is highlighted, that is, the limited liability of all the members composing the company. The limitation of liability of the members of a company forms the exceptional legal characteristic of this kind of partnership. The limitation of liability is a valued privilege in itself and as longsighted as it is operated legally and within the basis of the Companies Act, the personal assets of directors or share toters are not at risk. However, due to this privilege, there are a number of provisions, aimed at preventing possible abuses.Article 68 of the Act provides that, A company shall not be validly constituted under this Act unless a memorandum of association is entered into and subscribed by at least two persons, and a certificate of registration is issued in respect thereof. The memorandum bequeath allow all the information about the company deemed necessary to lessen opportunities for abuse. When the memorandum or the articles are drawn up in a humans deed or in a common soldier compose enrolled in the records of a notary unrestricted, an received copy thereof shall be delivered in lieu of the original. On receiving the above-named documents, the job of the Registrar is to examine them and, on being satisfied that all the requirements prescribed by law have been compiled with he pass on issue the certificate of registration. These measures and provisions will strengthen the credit and reputation of the company.The preference of company names is restr icted and, providing a chosen name complies with the rules, no-one else can use it. Article 4 of the Companies Act provides that A company shall not be registered by a name which (a) is the uniform as a name of other commercial partnership or so well-nigh similar as in the mental picture of the Registrar it could create confusion Therefore no two limited companies can exist with exactly the same name.It is essential for the company to have a share cracking and that the amount of such capital is stated and divided into shares of a fixed amount which according to Article 69(f) of the Act, must be stated in the memorandum. The said article states that, the amount of share capital with which the company proposes to be registered (hereinafter referred to as the authorize capital), the division thereof into shares of a fixed amount. The law also makes it unsurmountable for a company to issue shares with unsettled share capital. This is exactly possible in the case of a SICAV which is an enthronisation company with a variable share capital. Where a mysterious company is an enthronisation company with variable share capital, the name of the company shall be followed by the speech communication investment company with variable share capital or by SICAV, followed by the linguistic communication private limited company, limited or its contraction (ltd).A company can either be a private or public company. The company must have a name under which it can operate and enter into legal relationships with third parties. Article 70 of the Act states that . A public company may be designated by any name but such name must end with the words public limited company or their abbreviation p.l.c. A private company may be designated by any name, but such name shall end with the words private limited company or the words limited or its abbreviation Ltd. The memorandum of association has to state whether it is a public or a private company. The public company may be listed or non-listed on the stock-exchange. It stands to intellectual that this would not be possible for a private company because its shares cannot be made operational to the public at large.The members of a company manifest their wishes at general meetings by voting for or against proposed resolutions and as a rule the will of the majority of the members prevails and is covert on all.An important issue to yell is deciding which form of course partnership to use. In practice, the limited liability company is the most popular commercial partnership. offset printing and foremost, the principal benefit of trading via a limited company has always been the limited liability bestowed upon the companys officers and shareholders. out front the concept of limited liability many an(prenominal) people who had a substantial amount of resources would be reluctant to form a partnership due to the fear of losing everything as a result of the companys losses. With the introduction of limited lia bility that person roll in the hays that he is only liable up to the amount he has invested and therefore only that amount is at risk and not all of his property. Therefore, this low risk of limited liability encourages greater investment.Once a Company builds a good reputation, it even increases the value of its goodwill with the result of being more in demand for investment continuity. Another fact which promotes the use of a limited liability company is that the creditors who deal with companies know that they are dealing with a company whose shareholders liability is limited, namely from the fact that it has (Ltd) at the end of its name. The creditors thus know what they are going in for and know what the repercussions are if they enter into transactions with limited liabilities and therefore if they have doubts, they should not enter any contracts in the first place. equitable like all the rest of the commercial partnerships, the Limited Liability Company is a class person. A shareholder in the company is just a person who has just acquired shares but is a dissever person from the company. The company and the share holder are not one and the same thing and therefore the latter cannot be responsible for the obligations entered into by the company. In the Commercial Partnership Ordinance under parting 4(2) it was spelt out that a commercial partnership has a legal personality distinct from that of its members. Nowadays, even a bingle member company has a separate juridical personality.Another advantage of forming a company is that once a company is formed it continues despite the death, resignation or bankruptcy of management and members. Since the limited liability company is considered a lasting legal entity a company can only be terminated by rambling up, liquidation or other order of the courts or Registrar of Companies.Another reason why it is of an advantage to form a limited liability company is that it is unaffixed to desexualise new shareho lders and investors. A public company which is in need of money or wishes to invest in another business enterprise can be listed in the stock exchange and acquire the needed finance by means of trading by other shareholders or investors, hence the ownership of a company can be divided among several owners in the form of shares of stock. The issue, transfer or sales of shares is regulated by the Companies Act.With a limited liability company, the process of acceptance money from a bank is much easier. On registration with the MFSA the company is a legal person in conformation with the Companies Act and thus the bank will open an account and can secure its loan against certain assets of the business or against the business as a whole. When setting up a company business partners do not pay evaluate on their individual income but on a corporate level on company profits which may constitute benefits and allowance. In addition companies are canonic better beneficiary pension schemes which consequently are offered to the employees of the company.Since the introduction of the limited liability company a total number of 52,000 companies where registered with the Malta Financial Services Authority, piece only around 1,300 partnerships were registered. These statistics prove that it is the best finis one can make to drool out a business in the form of a limited liability company. In conclusion, a legal limited liability company helps you gain from a number of advantage mentioned above while you can limit your personal liability and protect your personal assets.BibliographyStatutory Sources* Chapter 386 of the Laws of Malta, Companies Act (1995)* Commercial Partnerships OrdinanceInternet Sources and websites* Coddan. Advantages And Benefits Of A Limited Company.. for sale http//www.ukincorp.co.uk/s-46-uk-company-formation-benefits.html. closing accessed quaternate May, 2011* European Commission. 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