Distinction among different types of business structures↓

Sole Proprietorship

• A business owned by 1 person
• No distinction between the owner and business
• Proprietor personally liable for all the debts and losses of business
• Firm cannot sue or be sued in its name
• Firm cannot own property in its name
• Owner must be individual
• Exists as long as the proprietor is alive and desires to carry on the business
• By proprietor, termination or cessation of business
• By Registrar, remove from register if the licence expired and has not been renewed

Partnership

• A business owned by at least 2 persons but not more than 20
• No distinction between the owner and business
• Partners personally liable for all the debts and losses of the partnership
• Partnership cannot sue or be sued in its name
• Partnership cannot own property in its name
• Partners must be individual
• Exists as long as all the partners remain in the partnership. Usually if a partner dies or leaves the partnership, the partnership is dissolved and assets sold and distributed, but the partnership agreement may provide otherwise
• By partners, termination or cessation of business
• By Registrar, remove from register if the licence expired and has not been renewed

Limited Liability Partnership (LLP)

• A business owned by at least 2 persons. There is no cap on number of partners
• A legal entity distinct from the partners
• -Partners not personally liable for the debts and losses of LLP beyond the agreed amount of contribution to LLP and/or debts and losses incurred by other partners -Partners personally liable for debts and losses incurred by LLP resulting from his/her own negligence
• LLP can sue or be sued in its name
• LLP can own property in its name
• Partners can be individual or body corporate (company or LLP)
• Perpetual existence
• By members or creditors winding up or compuslory winding up by the High Court with appointment of an Approved Liquidator
• By striking off

Company

• A legal entity limited by shares or limited by guarantee or unlimited company and may be formed as:
  • Exempt private company with not more than 20 individual shareholders
  • Private company with not more than 50 individual or corporate shareholders
  • Public company with no cap on number of individual or corporate shareholders
• A legal entity distinct from the shareholders and directors
• Shareholders’ liability limited up to the agreed amount of contribution to Company.
• Company can sue or be sued in its name
• Company can own property in its name
• Shareholders can be indiviudal or body corporate
• Perpetual existence
• By members or creditors winding up or compuslory winding up by the High Court with appointment of an Approved Liquidator
• By striking off