Corporation law Essay Example | Topics and Well Written Essays - 1500 words - 1

Corporation law - Essay Example Andy and Robert made some mistakes by not signing a written agreement on their partnership, by not choosing to set up an appropriate legal entity and by letting their personal relationship interfere in business. the real type of partnership between Andy and Robert, considering that the enterprise is called Freedom Diving, Leisure & Co, & Co – referring to a specific level of employees’ involvement in the management of the company; First of all, the legal status of Freedom Diving, Leisure & Co should be analyzed in order to seek out the legal implications of the two partners. Including ‘&Co’ in the name of the company implies that the employees participate in the management of the enterprise. Considering that at the beginning of their partnership Andy and Robert did not have employees, it is possible to assume that they were not aware of the legal stipulations in this matter and they just went along with the name they liked. On the other hand, the partners had legal alternatives to their partnership, but I would have advised them to choose a form of Limited Liability Partnership or Limited Company, both options having their advantages. On the other hand, a limited partner cannot participate in the management of the company4, otherwise he will become just as liable as a general partner5. In the case of Andy and Robert, the non-participation in the management of their own company is far from being possible, as it is they who are qualified in diving and it is a hobby that has become a source of income. As it has already been mentioned, both legal structures have numerous advantages, but there are some disadvantages that are difficult to avoid. The partners – Andy and Robert - should choose the one that fits their type of business best. On the other hand, there is a big minus in the LLP option – the fact that limited partners cannot participate in the management of the company, otherwise they