BPP University College Of Professional Studies Limited (BPP)
Concise notes on the pre-programme reading for Business Law & Practice (BLP). These notes formed an excellent basis to begin BLP, helping me achieve 75% in the exam.
Have you left the pre-programme reading to the last minute? Don't stress. These notes cover everything you need to know AND then ...
BPP University College Of Professional Studies Limited (BPP)
BPP University College Of Professional Studies Limited
Business Law & Practice
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BLP pre-module reading
Section 1: Considerations when starting a business
1. Why businesses are set up
• To make a profit
2. The requirement for a business to raise finance
• Businesses need to raise finance for a number of reasons
including: purchasing premises; employing staff; obtaining
professional advice; and growth and expansion.
• Businesses raise finance in four basic ways
• Owners may invest capital
• Outside investors may invest capital in order to share in its
future profits
• Borrowing
• A proportion of profits may be retained rather than
distributed to investors and owners
3. The different ways of carrying on a business, including some of the
factors influencing the choice of business medium
• Types of business media
• Sole trader
• Legal status
• Sole trader and business are one and the same
entity
• Unlimited personal liability
• Relevant legislation
• No specific legislation, governed by relevant
commercial and tax legislation, common law
and accounting rules
• Unlimited personal liability to third parties
• Partnerships
• Wide definition in S1 Partnership Act 1890 with no
intention needed-> clients may be conducting
business as a partnership without even knowing it
• Many types of partnerships e.g. informal family
businesses to large law firms
• Legal status
• No separate legal identity -> technically unable
to own property or enter into contracts
, • Individual partners will conduct legal action in
their own name e.g. they will own property
jointly
• Relevant legislation
• Partnership Act 1980
• Other relevant legislation and the common law
• Unlimited personal liability to third parties on either a
joint, or joint and several, basis
• Limited partnerships
• Some partners are not liable for the debts and other
liabilities of the partnership -> ‘limited’ partners vs
‘general’ partners (need at least one of both)
• 6 April 2017 new sub-category -> private fund limited
partnership -> a list of permitted activities in which
limited partners can be involved in without being
“involved in management”
• Legal status
• No separate legal identity
• Relevant legislation
• Limited Partnerships Act 1907
• Liability to third parties
• Limited partners have limited liability, but only
if they are not involved in the day-to-day
management of the partnership
• If they become involved, they lose their limited
status and become general partners =
unlimited personal liability
• Limited liability partnership (LLP)
• A hybrid -> flexibility of a partnership with the added
advantage of limited liability
• Legal status
• Separate legal entity, it is a body corporate
• LLP may own property, enter into contracts,
and sue and be sued in its own name
• For tax purposes, it is treated as a partnership
and members are taxed as partners -> each is
liable to pay tax on their shares of income or
gains
• Relevant legislation
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