The Doctrine Of Establishing A New Company

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Table of Contents Business Expansion Option 3 1. Issue 3 2. Rules 3 3. The Doctrine of Establishing a new company 3 4. Conclusion 5 Legal Implications 5 1. Issue 5 2. Rules 6 3. Application to Case 6 4. Conclusion 8 References 9 QUESTION 1 (10 Marks) (1000 words) (Companies and business planning) Mary is the owner of a very successful business selling women 's shoes. Mary 's business is expanding rapidly and she wants to update her business structure from that of sole trader to a more appropriate structure. She seeks the advice of her accountant who tells her that she has a number of options, all of which have advantages and disadvantages. What would be your recommendation to Mary and why? What factors would…show more content…
In this structure company is treated as separate legal entity and which is liable for its debts and the owner is a separate entity. However, to get the capital base structured and company 's reputation built up,the owner will have to become the personal financial guarantor for any type of loan agreement or any business lease agreement. The Doctrine of Establishing a new company – New companies are the key elements of any Economy. The U.S. Census Bureau in 2002 counted around 23 million firms and nearly 24 million business “establishments”. In 2006 an article, “The Seven Pitfalls of Business Failure,” noted that half of the new businesses fail within their first five years of operation. However, careful planning can help a company be a successful and profitable undertaking. The process of creating a new company includes the following: 1) The preparation of all documents and forms, the convening and organization of a General Meeting, a notaries deed, deposit trustee, the opening of a bank account for payment of the registered capital and the necessary trade licenses 2) Proposal creation for an entry of the company in the Commercial Register which needs to be submitted along with all the necessary annexure to the relevant Registration Court. 3) Registration of the company at the financial authority for the relevant taxes. The basic steps that needs to be followed for starting a business are – Step 1:
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