Help for this QUESTION approach: Jane, Joan and joy are three friends who would like to form a company to carry on the business of pest control and cleaning services. They have approached acompany law student to advise them on the type of company they can form
Jane, Joan, and Joy can consider forming a private limited company (Ltd) for their pest control and cleaning services business. Here's why and how this structure would suit their needs: advantages of forming a private limited company Limited liability Shareholders' personal assets are protected in case of business debts or liabilities. They are only liable up to the amount they invested. Separate legal entity The company is a distinct legal entity from its owners, which allows it to enter into contracts, own assets, and sue or be sued in its own name. Ease of raising capital They can raise funds by issuing shares to themselves or other private investors without going public. Continuity The business will continue to exist even if one of them decides to leave or sell their shares. Credibility Customers and suppliers often view private limited companies as more reliable and professional than sole proprietorships or partnerships. formation process choose a name Select a unique name for the company that reflects its brand and services. prepare a memorandum and articles of association The memorandum defines the company’s objectives, while the articles outline how it will be managed. register with the registrar of companies Submit the necessary documents, including the memorandum and articles of association, and pay the required fees. appoint directors and shareholders Jane, Joan, and Joy can each be directors and shareholders, dividing ownership based on their agreement. obtain licenses Apply for the necessary pest control and cleaning service permits. alternative structures If they prefer a simpler structure, they could consider: partnership They would share profits, losses, and responsibilities. However, they would have unlimited liability. sole proprietorship (not ideal) One person would own and manage the business. This does not suit three partners equally involved in the business. recommendation Forming a private limited company is the most suitable option for Jane, Joan, and Joy as it offers flexibility, professionalism, and protection for their personal assets while allowing them to work collaboratively.
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Help for this QUESTION approach: Jane, Joan and joy are three friends who would like to form a company to carry on the business of pest control and cleaning services. They have approached acompany law student to advise them on the type of company they can form
Jane, Joan, and Joy can consider forming a private limited company (Ltd) for their pest control and cleaning services business. Here's why and how this structure would suit their needs:
advantages of forming a private limited company
Limited liability
Shareholders' personal assets are protected in case of business debts or liabilities. They are only liable up to the amount they invested.
Separate legal entity
The company is a distinct legal entity from its owners, which allows it to enter into contracts, own assets, and sue or be sued in its own name.
Ease of raising capital
They can raise funds by issuing shares to themselves or other private investors without going public.
Continuity
The business will continue to exist even if one of them decides to leave or sell their shares.
Credibility
Customers and suppliers often view private limited companies as more reliable and professional than sole proprietorships or partnerships.
formation process
choose a name
Select a unique name for the company that reflects its brand and services.
prepare a memorandum and articles of association
The memorandum defines the company’s objectives, while the articles outline how it will be managed.
register with the registrar of companies
Submit the necessary documents, including the memorandum and articles of association, and pay the required fees.
appoint directors and shareholders
Jane, Joan, and Joy can each be directors and shareholders, dividing ownership based on their agreement.
obtain licenses
Apply for the necessary pest control and cleaning service permits.
alternative structures
If they prefer a simpler structure, they could consider:
partnership
They would share profits, losses, and responsibilities. However, they would have unlimited liability.
sole proprietorship (not ideal)
One person would own and manage the business. This does not suit three partners equally involved in the business.
recommendation
Forming a private limited company is the most suitable option for Jane, Joan, and Joy as it offers flexibility, professionalism, and protection for their personal assets while allowing them to work collaboratively.
How do answer questions in company law