The Key Aspects Of Forming A Business

2503 Words Apr 3rd, 2016 11 Pages

Investing and proper planning is the key aspects of forming a business. Hence understanding business structures will offer an insight into the necessary management and technical skills that would be essential in order for the business to develop and prosper. The key business structures that will be explored involve partnerships and corporations.
A partnership is a relation between two or more individuals who contribute their resources for the achievement of a specified outcome, commonly profit such as in Hope v Bathurst City Council (1980) 144 CLR 1 . These small businesses are characterized by mutual cooperation, responsibility and obligation . The partnership firm is governed by the Partnership act 1891 where registration of the firm is not compulsory as the partnership business has no legal existence from its partners. Thus individuals of the partnership have unlimited liability where each partner may be bind for another’s wrong doings or negligence such as in Polkinghorne v Holland (1934) 51 CLR 143 . Moreover dissolution of the partnership may cease to exist as a result of retirement, insolvency or death such as in section 32 and 33 of the Partnership Act .
Compared to a corporation which itself is an artificial entity created by law, as it is a separate legal entity with continuous progression and limited liability. Management of a company involves a larger array of responsibility and obligation in order for sufficient decision making, for the benefit of…

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