Legal forms of business organisation
Regardless of its nature and where it is conducted, a business has to be structured within a defined legal framework. In every jurisdiction, the law provides a number of options from which to choose. The proprietors of the business will select the form best suited to their particular needs. These may relate to issues such as limitation of liability, flexibility of management structures, privacy of financial data, taxation, and sources of finance. As the structures available are creatures of the law, they will be regulated by the detailed rules of the particular country involved. While no two countries’ laws will be the same, at a general level it is possible to identify forms of business organisation in most jurisdictions that possess broadly similar characteristics. In this chapter, examples are taken from the UK, the USA, France and Germany. The main issues which will be examined relate to
formation, liability of members of the organisation, management and control, and liability of those entrusted with the management of the business towards investors and outside creditors.