Explain to thomas the current form of business

Reference no: EM133179578

Unit - Corporate And Business Structures

You work for the Business Division of Jones McCalvey LLP. You have been asked to advise Thomas.

Eleven years ago, Thomas started a business as a sole trader importing silk scarves from India. After five years, he then got his wife Belinda on board to help out with the business. Belinda has been a great help and the business has been growing fast and earned substantial profits.

Thomas recently got in touch with an old friend Stephen who has been a pioneer in the sustainable food supply sector over the past ten years, and is now an executive director of a fast growing company called VegGreen Ltd. ("VegGreen"). Stephen asked Thomas whether he was interested to invest in his business. Stephen also said that GoVeg is considering changing its business form to a public limited company in order to grow the business further.

Thomas, at the age of 45, has been in the silk scarf industry for eleven years and feels that now is his opportunity to invest in a new venture and decides to get involved in Stephen's business. He is even thinking of closing down his current business so that he can devote himself to GoVeg. As a prudent businessman, he would like to seek advice from your firm before he takes any action.

Q. Explain to Thomas the current form of business that he is now in with his wife Belinda and their potential liability in this business.

Thomas was a sole trader before he got Belinda on board to his business Their business is a general partnership.

Definition of Partnerships ‘the relationship which subsists between persons carrying on a business in common with a view of profit' (s.1 PA1890)

Each of their potential liability can be unlimited as each of them will be jointly and severally liable of all the debts incurred by the business.

There is no separate legal personality in general partnership, unless the partnership is in the form of a limited liability partnership or there is a partnership agreement in place to state otherwise.

Reference no: EM133179578

Questions Cloud

Prepare multi-step income statement for Green Corporation : Prepare multi-step income statement for Green Corporation for year ending 2019 based on the below information. This is first year of operations for corporation

Write down the transition probability matrix of purchases : Of those who bought APP, 60% buy it again, 20% change to SUM and 20% change to HUA. Write down the transition probability matrix of purchases

Destruction of an institution : Poor leadership can aid in the destruction of an institution, whether it's a government or a Fortune 500 company. Any person who fills a leadership role previou

What would you expect the nominal rate of interest to be : Question - What would you expect the nominal rate of interest to be if the real rate is 4.1 percent and the expected inflation rate is 6.9 percent

Explain to thomas the current form of business : Explain to Thomas the current form of business that he is now in with his wife Belinda and their potential liability in this business

Journalise cricket central inventory transactions : Cricket Central uses FIFO method and a perpetual inventory system. The sales price of each Cricket Bat is $145. Journalise Cricket Central inventory transaction

Calculate carmen vacation pay : Her earnings for the twelve month vacation year are $54,191.55 regular wages, $3,962.23 overtime pay, Calculate Carmen vacation pay

Why line managers adopt the rational approach to recruitment : You should cite relevant theory to support your points and illustrate them with empirical evidence using Harvard referencing.

Evaluate the devises and legacies : Any burial or cremation wishes Devises with explanation Legacies with explanation - Cy-pres clause for charity with explanation Gift of residue

User Account

All Pages