HOMEWORK NUMBER 1

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1. How many business forms are there in the world?
2. Compare the main business forms in civil law and common law?

I.

Answer
Question I
Main business forms in the world
1. Sole Proprietorship;
2. Partnerships;
3. Corporations
4. Limited Liability Company
Number of
Owners

Liability for
Firms
Debts

Owners
Manage the
firm

Sole
Proprietorsh
ip

yes

Partnership

More than
2
Many

yes

Maybe
(they can
hire CEO
but still
hold
responsibilit
y)
yes

At least 3
founders
or general
partners,
no limit on
limited
partners
1

Founder
Yes
Limited
partner
No

Corporation

Limited
Partnership

Single
member
Limited
Liability

No

Yes
(among
their
shares in

Ownership
Change
Dissolves
Firm
yes

Taxation

yes

Personal

No, hire
officers to
manage
Yes

no

Double

Yes

Personal

No

No

no

no

Income tax
License
tax

Personal

Company
Limited
Liability
Company
with more
than two
member

II.

Unlimited

company)
Yes
( among
their
shares in
company)

No ( they
can hire
someone
else)

No

Double

Question II

1. Some definitions:
a. Civil Law states: Germany, Vietnam, Japan
b. Common Law: England, British Common Wealth countries and the United
States

2. Comparison
a. Comments:
-

Common Law have more business forms and more specific description to each
types

Civil law business forms

Civil law Business forms

Common Law Business forms

Company: an association of persons or of

Company: an association of persons organized

capital organized for the purpose of carrying

for the purpose of carrying on a commercial,

on a commercial, industrial, or similar

industrial, or similar enterprise

enterprise
Partnership: a company of two or more

Partnership: a company of two or more

persons who co-own and manage a

persons who co-own and manage a business

business and who each liable to the full

for a profit and who each liable to the full extent

extent of their personal assets for its debts

of their personal assets for its debts

Limited partnership: a company of two or

Limited partnership: a partnership consisting

more persons, at least one of whom has

of one or more general partners (thnh vin

unlimited personal liability for the debts of

hp danh) who manage the business and

the business and at least one other who is

who are each liable to the full extent of their

an investor having limited liability

personal assets for its debts and one or

more limited partners (thnh vin php l) who
liability is limited to the funds they invest.
Limited partner:
-

No right to vote

No right to be in BOD

No legal representatives

Silent Partnership:

Secret partnership:

a secret relationship between two or more

A partnership I which the participation of one or

persons, one of whom carries on a business

more persons as partners is not disclosed to

in his name alone without revealing the

the public by any of the partners. All of the

participation of the other who has limited

partners hav unlimited personal liability

personal liability.
Partnership limited by shares: a company of

Joint Stock Company: an unincorporated

one or more general partners who have

association of persons whose ownership

unlimited personal liability for the debts of the

interests are represented by transferable

company and with limited participation by

shares. The shareholders have unlimited

investors in the form of shares. The company

personal liability

is taxed as a corporation
Common law limited liability company: An
unincorporated association that is treated as a
partnership for tax purposes ans that provides
limited liability for its owners
Business trust: a business arrangement in
which the owners of a property, known as
beneficiaries, transfer legal title to that property
to a trustee who then manages it for them. tHe

beneficiaries hold transferable trust certificates,

entitling them to the income generated by the
property and a residual equitable share at the
time the trust is terminated. The trustee has
unlimited personal liability where as the
beneficiaires have limited personal liability.
Corporation: a company of capital whose

Corporation: a separate juridical entity owned

owners have limited personal liability

by shareholders who may have limited,

unlimited or no liability

Stock corporation: a corporation that can

Public Corporation: a corporation that can raise

raise money in the public market through the

money in public market through the sale of

sale of freely transferable shares. Its

freely transferable shares. Its financial

financial statements have to be disclosed to

statements have to be disclosed to the public

the public
Limited Liability company: a corporation

Private corporation: a corporation that may not

owned by members that does not issue

ask the public to subscribe to its shares,

negotiable share certificates and is subject to

bonds, or other securities and that is subject to

minimal public disclosure laws

less stringent public disclosure laws than a

public corporation
Unlimited liability corporation: a corporation
whose members are liable in the event it is
wound up and its assets are insufficient to
cover its debts
NO liability corporation: a corporation whose
share-holders are not obligated to pay any call
for contributions made by the firms or to pay
any of the firms debts, but who will not receive
any dividends if a call is due or unpaid.

J.D and liability

When has J.D, company has limited liability

Advantage:

III.

Income belongs to company

Tax paid by company

Additional examples

COMMON LAW OF ENGLAND

-

Corporation

Limited company

Unlimited company

Limited liability partnership

Limited partnership

Not-for-profit corporation

Company limited by guarantee

Partnership

Sole Proprietorship

Unincorporated legal forms: no separation in legal personality

Sole Trader
Unincorporated association
Partnership
Limited partnership
Trust
Incorporated legal forms
Limited company
Limited Liability Partnership
Community Interest company
Charitable Incorporated Organization

England:

Industrial and Provident Society (Co-opertive Society Coop,Community Benefit- BenCom

Financial mutual