Organizations require huge investments. As the investments are big, the risks involved are also very high. While undertaking a big business, the two important limitations of partnerships are limited resources and unlimited liabilities of partners. The company form of partnerships has become popular to overcome the problems of partnership business. Various multinational companies have their investors and costumers spread throughout the world.
In order to maximize and utilize the organizational and managerial abilities effectively, it is necessary for a limited liability company to be supported not only by its own organs but also by clear and precise regulations. It is necessary to have a brief overview of the business organization from the framework of company law.
Commercial sector recognizes three principal categories of business organizations −
● Sole proprietorship (Generally used for informal purposes)
● Partnership (General or limited)
There are three types of partnerships −
● Persecution per data (governed by the civil code)
● Persecution firms (governed by the civil code as well as the commercial code)
● Persecution (governed by the civil code as well as the commercial code)
It is difficult to determine the absolute equivalents between these partnerships and partnerships under common law tradition.