Accounting And Regulatory Responsibilities Of The Company Essay

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Unlike Sole Traders and Partnerships, LLP’s have a duty of public disclosure, meaning that certain key business information has to be registered with the registrar of companies and as such, this information will be available to the public. Essentially the LLP is a hybrid, combining elements of a traditional partnership with that of an incorporated company. The administrative and regulatory demands of LLPs and Limited Companies are higher and the structure of these two business mediums is largely complex in comparison to that of Sole Traders and Partnerships. Concept of Liability The Sole Trader liability is unlimited. They are the complete owner of the business, as result they are wholly responsible for the debts of the company and therefore whatever the business owes. If a Sole Trader is in breach of contract they are fully liable. They are also liable for their own negligence in tort, if they employ someone else and that person is negligent, the Sole Trader is further liable through the concept of ‘vicarious liability’ for employees. Where a Sole Traders business becomes insolvent, the assets no longer matching liabilities, the trader is sued as bankrupt brought about by the procedure known as bankruptcy laid down in the Enterprise Act 2002. As a Partnership is not a legal person or entity, although it can now be sued and can sue in its own name, all partners are jointly liable under S.9 PA1890 , and liability is unlimited. Undoubtedly in the course of the

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