First Principles of Business Law

1.   Legal regulation of business organisations 

1.1. Distinguishing different business structures

There is more than one way of carrying on a business. A business can be operated by its owner as a sole trader; run by a trust; run as a joint venture; as a partnership; or as a proprietary or public company.

There are important legal differences between these alternative business organisations. Persons who are starting up a business, or expanding an existing business, will need to know how the law regulates different types of business. This will enable them to choose the most appropriate type of organisation.

The differences between various kinds of business organisation are also important to persons who deal with a business, for example as a contractor, an employee, or as a provider of goods or services. Such persons need to understand the legal nature of the business they are dealing with, and how this may affect the legal rights and duties that arise. In particular, it is important to know who is legally liable for business debts and other obligations owed, and to what extent such liability can be enforced.