BPP University College Of Professional Studies Limited (BPP)
Legal Practice Course
Business Law and Practice
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Pre-Module Reading - Starting a business
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BPP University College Of Professional Studies Limited (BPP)
Legal Practice Course
Business Law and Practice
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1. Pre-Module Reading-
SECTION 1: Considerations when starting a business-
Why businesses are set up?-
Generally, for a profit.
Generated by selling/ providing services/ goods
o This will incur the business expenses.
o If the income of the business exceeds the expenses = Profit.
o Proportion of this profit is likely given to the owners of said business; while the rest is
retained by the business, to allow growth.
--
Finance-
Why do businesses need to raise finance?-
To purchase the business premises
o For operation, stock, plant, machinery, + any needed hardware/ software for producing
and selling the stock
Employ staff & Provide a service to customers
From time – to –time professional advisors & accountants
Expand & grow the business
o Expand the premises/ equip, marketing, acquiring other businesses.
-
How do businesses raise finance?-
4 basic ways:
Owners invest by making contributions of capital
Outside investors contributions to capital, in order to share future profits
Borrowing money
Proportion of profits retained via business in order to help it grow
-
Business Media Overview-
Sole Trader-
Sole trader conducts business personally.
The business & the sole trader are one in the same entity.
, Hence business has no legal identity of its own
When entering into contracts, this means the ST does so in his own personal capacity and will
have unlimited liability under it
No specific legislation for ST – just the relevant law
ST have unlimited personal liability to 3 rd Parties.
-
Partnership-
Governed by PA 1890 and other relevant leg.
Partnership Act 1890 s1: Partnership is the relation which subsists between persons carrying on a
business in common with a view of profit.
Arguably a wide definition as it applies irrespective of contrary intention
There are many forms of a partnership -
Some involve an informal association between 2 persons to carry on a business without any
express agreement
Others may have a very large and professional business, with an elaborate partnership deed
Partnerships, although defines by statute – have no separate legal identity
Hence partnership is unable to enter into contracts or own property – and so the partners will
conduct said things in their own name, own the property jointly & enter into contracts jointly.
On insolvency – creditors are able to satisfy debts by enforcement against the personal assets of
each partner themselves
Partners have an unlimited liability to 3 rd parties – either joint, joint and several
Determinable by the nature of the liability
-
Limited Partnerships-
Here, some partners will not be held liable for the debts and other liabilities of the partnership.
These are ‘Limited Partners’ - distinct from the General Partners
There is a requirement from involvement of at least 2 partners – Ie: one LP and one GP
No Sep legal identity
Limited Partnership Act 1907 + relevant law, leg
A new sub-category of LP was created on 6 th April ‘17 - ‘Private Fund Limited Partnership’
A list of permitted activities in which the LP can be involved, without being deemed to be
involved in management
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