The UK business organisations are sole traders, general partnerships, limited liability partnerships (LLPs) and registered companies with limited liability. For the entrepreneur, the choice of vehicle for carrying on the business is usually determined by the desire to limit their liability in the event of the failure of the business to the amount of the capital invested. This is impossible in the case of the sole trader and the general partnership, where the proprietor and the partners have unlimited liability for the debts of the business. Limited liability protection for entrepreneurs is possible only with LLPs or limited liability companies which are separate legal persons in law. The business is, in effect, carried on by the legal person which is fully liable for the business debts while the partners’ or shareholders’ liability is limited to their capital investment.
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- The business forms available under UK law
- Macmillan Education UK
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- Chapter 6