Different Forms Of Business

What is Ltd and what Plc, and how to relate them with Croatian d.d. or d.o.o? In this unit we will outline the legal forms of business in English speaking countries, the United Kingdom in particular. The conclusion is that Croatian equivalents are not entirely interchangeable but rather represent the most similar legal solutions.

There are different ways of starting a business. The law prescribes what you must do in each case. You have to know how to register a business or even if you need to register it at all. Find out the similarities and differences between setting up companies in Croatia and in the UK. Here are some of the most common legal forms of business in the UK:

The business and the owner are the same person in law. The owner is responsible for all the debts of the business. There is only one owner and no partners. A sole proprietorship is not a corporation and it does not pay corporate taxes – the owner pays personal income tax on the profits made. Most sole proprietors will register a trade name or a DBA (Doing Business As). This allows the proprietor to do business under a name other than their proper legal name and also to open a business account with banking institutions.

In the case of general partnership a business is owned by two or more people (partners) who are personally liable for all business debts. To form a partnership, each partner normally contributes money, valuable property or labour in exchange for a partnership share, which reflects the amount contributed. Partnerships are easy to form since no registration is required with a government agency (although tax registration and other requirements to conduct business may still apply).

This type of partnership protects a partner from personal liability for negligent acts committed by other partners or by employees not under his or her direct control.

This is a type of partnership where the members’ liability is unlimited – i.e., they are liable to contribute any sums required to pay off the company debts, should it go into bankruptcy.

This is a company which is not permitted to offer its shares to the public. This legal form tends to be used for smaller businesses. There is no minimum capital requirement. Approximately 90% of private companies are small or medium-sized. The term limited refers to owners liability or legal responsibility of the owner for the company’s debts. Limited liability indicates that the owners are liable only to the amount of their investment into the company and not with all their assets as in unlimited liability types.

This legal form is appropriate for larger businesses where shares are intended to be available to the general public. The company is not obliged to float its shares or offer them for sale, and it can remain as private as the shareholders wish. A public company must have a minimum authorised capital of £50,000.

As its name says, it is an enterprise, often a corporation, owned by a government.