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CHAPTER 1 : BUSINESS ORGANISATIONS, image, image, image, image, image,…
CHAPTER 1 :
BUSINESS ORGANISATIONS
9. Transferability of Shares/
Interest/ Ownership/ Assets
Partnership
- Interest can be transferred subject to consent of partners
Company
-
Public co:
Shares can be freely transferred
Private co:
There are restrictions in
transferring the shares
Sole-Proprietorship
- Can sell and transfer the assets of the business to a new owner
1. Requirement of Law
Partnership
- Under the Partnership Act 1961
Company
- Under the Company Act 2016
Sole-Proprietorship
- Does not have any act but need to register corporation first under the Registration of Business Act 1956
3. Number of Members
Partnership
- :green_cross: > 20
Company
-
Public
: Unlimited &
Private
: 50 members
Sole-Proprietorship
- Single owner
6. Borrowing
Sole-Proprietorship
- Limited to using our own assets
Partnership
- Cannot create a floating charge
Company
- Has more avenues to borrow funds
7. Liability
Partnership
- Unlimited
Company
- Limited
Sole-Proprietorship
- Unlimited
10. Separate Legal Persons
Partnership
- The agreement comes to an end if any partner dies, is injured, withdraws, sells his interest or a new partner is accepted into the company.
Company
- Despite no human being the company will remain in existence
Sole-Proprietorship
- The corporation will not continue to exist if the owner dies
2. Taxation
Partnership
- Partners' income tax
Company
- Tax based on profit
Sole-Proprietorship
- Tax advantages to the owner
5. Perpetual Succession
Sole-Proprietorship
- No perpetual succession
Partnership
- Dissolved in the event of the death or bankruptcy of any partner
Company
- May only be destroyed by a process of the law
8. Registration Procedure
Partnership
- Less publicity and lower costs are involved (Registration of Business Act 1956)
Company
- More cumbersome to incorporate a company (Companies Act 2016)
Sole-Proprietorship
- Minimal legal formalities, easiest formation (Registration of Business Act 1956)
4. Management
Partnership
- Managed by partners
Company
- Managed by the Board Directors
Sole-Proprietorship
- Managed by sole trader himself
JAYANITHA A/P ARUMUGAM
012020020566
Compare and contrast 10 differences between the 3 main types of business organisations in Malaysia.
