Joint-stock companyAn organization or association comprising of peopleorganized to direct a business for pick up and having a joint stock of capital spoke to by shares claimedexclusively by the individuals and transferable without the assent of thegathering.FORMATION OF A JOINT STOCK COMPANYStage I*Promotiona) Discovery of Ideab) Investigationc) Assemblingd) Financial arrangementStage II*Registration or Incorporationa) Preparation of MOA and AOAb) Filing of necessary documents for Registrationc) Issue of Certificate of IncorporationAfter that you should identify the types of the company,there are two types of Joint Stock Company they are:1- Private Limited Company 2-Public Limited Company Thin Start Operation. Advantages and disadvantages of joint stock companiesAdvantages:• LimitedLiability• PerpetualExistence• LargeScale Operation• Transferabilityof Shares• Raisingof Funds • SocialBenefitDisadvantages:• Formationis not easy• Double Taxation• Controlby Board of Directors• ExcessiveGovernment Control • Delay inPolicy Decisions• Speculationand Manipulation The management of a companyThe management of a company is delegated to the Board ofDirectors. Directors are elected by the shareholders though some may benominated by special interests like debenture-holders, etc. The Companies Actcontains a number of provisions in respect of directors.
Directors must act as a Board, i.e., decisions arrived atonly at meetings of the directors will be binding except that, depending uponArticles, and subject to Section 289 of the Act, resolutions may also beadopted by circulation.
Individual directors have no powers unless specificpowers are delegated at a properly held meeting of the Board of Directors.The Board also has the power to appoint sub-committees todeal with specific matters. A meeting of the Board of Directors must be heldonce in every three calendar months. The Central Government has the power toexempt any class of companies from this provision. The quorum is two directorsor one-third of the total number whichever is higher (not counting interesteddirectors). Examples of joint stock companies in Saudi ArabiaThere are many joint stock companies in the Kingdom of SaudiArabia such as:• AbdullahAl Othaim Markets• BankSaudi Fransi• JarirBookstoreDescription of theGeneral PartnershipA General partnership is the most oversimplified kind oflegal structure intended for the circumstance in which at least two individualsare working together in some type of business movement. General Partnerships Partners divide responsibility formanagement and liability, as well as the shares of profit or loss according totheir internal agreement.
Equal shares are assumed unless there is a writtenagreement that states differently. In a general partnership, but profits andlosses flow through to the partner’s tax returns.A general partnership the basic form of partnership undercommon law, is in most countries an association of persons or an unincorporatedcompany with the following major features: * To be established by agreement and contract. * Consists of two ormore partners.* All partners shall be equally responsible for any legalorder of the Company’s debt. *Partners in thepublic company share equally the company’s responsibilities and obligations.
Formation and funding of the General PartnershipThe partnership agreement *General partnership created by handshake, words, eitherverbal or written.Partnership name The*It can operate under name of any one or all of partners.* Right to participate in managementAll partners has rights to participate in management and hasan equal vote on partnership matters unless otherwise agreed.Right to an accounting *Partners cannot sue partnership but they may bring an actionfor an accounting.
Partners’ rights to share in profits *UPA mandates right to an equal share in profits and losses.Advantages and disadvantages of the General PartnershipAdvantages of a General Partnership• Easy toEstablish.• SimplifiedTax Filing.• With morethan one owner, the ability to raise funds may be increased, both because twoor more partners may be able to contribute more funds and because theirborrowing capacity may be greater.• Partnershipsprovide moral support and will allow for more creative brainstorming.Disadvantages of a General Partnership• NoSeparate Business Entity from Partners.• Partners’Personal Assets Unprotected.• PartnersLiable for Each Other’s’ Actions.
• PartnershipTerminated Upon Death or Withdrawal of One of the Partner.• generalpartnership is that all partners are personally liable for business debts andliabilities .Management of the General PartnershipGeneral partners have management rights.A general partnership is managed by the partners, but themanagement rights are not required to be equal. The partners are free to enterinto a written agreement specifying the duties, responsibilities, rights,powers and limitations of each partner. In the absence of a written agreement,however, all partners have equal rights to manage the business of thepartnership and to enter into agreements, incur obligations, or conduct otheractivities on behalf of the partnership business.Liability of the General PartnershipGeneral partners of a limited partnership have unlimitedliability for debts and obligations of the partnership.the owners of a partnership have boundless individualliability.
each partner in an organization is mutually at risk for thepartnership’s commitments. Joint liability implies that the partners can besued a gathering. A several liability implies that the partners areindependently at risk. each partner is both mutually and severally at risk forthe harms coming about because of the wrongdoing of different partners, and forthe obligations and debts of the partnership.of the General Partnership Aramco companySaudi Aramco has entered into a strategic partnership withPetronas Chemicals Group Berhad (PCG) to enhance the value and competitivepositioning of its petrochemicals projects within the PETRONAS(PIC) in thesouthern Malaysian state of Johor.The partnership marks a strategic, mutually beneficialrelationship that will provide PIC with high-impact strengths and synergiesfrom both Saudi Aramco and PCG.Under the terms of the venture’s share purchase agreement(SPA), signed between PCG and Saudi Aramco’s Aramco Overseas Holding CooperativeU.A.
(AOHC) subsidiary, the parties have equal ownership in PRPC Polymers SdnBhd (PRPC Polymers) within PIC.The signing of this agreement with PCG is another positivemilestone for Saudi Aramco after the signing of the SPA with PCG’s parentcompany PETRONAS during. Description of LP: A limited partnership (LP) exists when at least two partnersjoin to together direct a business in which at least one of the partners isrisponsile of amount of money that partner has invested. Limited partners don’tget dividends, yet appreciate guide access to the stream of salary and costs.
This term is likewise alluded to as a “limited liability partnership” (LLP). The main advantageto this structure is that the owners arecommonly not subject for the debts of the organization.Formation of LP: All U.S. states represent the arrangement of limitedpartnerships under the Uniform Limited Partnership Act, which was changed in1985. It was initially known as the Limited Partnership Act, made in 1916 andreceived by 49 states, in addition to the Region of Columbia. To shape a limited partnership, the partners must rigesterthe venture in applicable state, regularly through the office of the localSecretary of State .
It is vital to acquire all pertinent business allows andlicenses, which is depends on area, state or industry. The U.S. Small BusinessAdministration records down all local,state and federal permits and licenses important to begin a business. Advantages and disadvantages of LP : advantages and disadvantages of partnership are comparableto those of a general partnership.
The primary favorable position of a limitedpartnership is the limited risk that limited partners appreciate, ensuring themagainst individual obligation for the partnership’s obligations and differentcommitments. The limited obligation security managed limited partnersmakes this a more appealing element than a general partnership in that it isless demanding to pull in financial specialists than a general partnershipwhere each general partner’s personal assets are at risk.It is in this manner far less demanding to advertise limitedpartner interests as an investment, especially concerning discrete tasks, forexample, real estate improvement.
Be that as it may, such limited accompliceinterests are by and large considered “securities” and will in thismanner be liable to control under government and additionally state securitieslaws. With the upside of limited risk, be that as it may, comesthe burden of not having the capacity to effectively partake in the managementof the LP.Management of limited partnership: A LP must have no less than one general partner and onelimited partner, yet there is no legitimate most extreme on the quantity ofeither kind of accomplice. In any case,as a practical matter , the limitedpartners are the aloof financial specialists who support the business wanderand the general partners are normally an individual or little, reasonablegathering that works the business regularly. limited partners may be individuals, trusts, estates, or other entities.The preservation of a limited partner’s limited liabilityprotection is reliant upon extremely confined rights to take an interest in theadministration of the business or have voting rights on choices of thepartnership. A limited partner who abuses the limitation on taking partin administration of the LP dangers losing his limited risk for partnershipobligations and commitments. Limited partners are, regardless, ordinarily givencertain voting rights as for real partnership choices, for example, – Theoffer of all (or considerably all) of the partnership’s advantages – Theaffirmation, expulsion, or maintenance of a general partnerThe passing or renunciation of a limited accomplice does notcause the disintegration of a LP.
In any case, statutes commonly give that if ageneral accomplice passes on or leaves, the LP will be broken up unless certainconditions are met.Liability of LP: A limited partner who holds this status by not shamefullytaking an interest in the management of the partnership business is just indanger for the capital added to the partnership. A limited partner has noindividual obligation for any cases against the partnership and the limited partner’s personal assets are not atrisk. Example of LP in Saudi Arabia: Total Care Saudi Co. Limited Liability Company Description of LLC: a LLC consolidates the profitable limited liability normalfor a company with the go through tax collection of an association or soleproprietorship. While associations and sole proprietorships stay away fromtwofold tax collection as go through duty substances, they don’t offer anylimited liability security for proprietors. Correspondingly, a company offerslimited liability security yet the capability of twofold tax assessment in a CEnterprise. While a S Company decision makes a go through expense element foran enterprise, the assessment treatment isn’t indistinguishable to a LLC.
A LLC might be overseen exclusively by the proprietors,called individuals, or the individuals may delegate at least one administratorsto maintain the business every day. A LLC is in this way described as partoversaw or chief oversaw.A LLC is shaped by recording Articles of Association withthe Secretary of State. A LLC permits individuals impressive adaptability indeciding the organization’s management structure. This is refined through acomposed working assention among the individuals to control matters, forexample, how management will be sorted out, rights of individuals, portion anddissemination of benefits and losses, and transferability of membership. StateLLC Acts give default arrangements that will govern if the individuals don’t gointo a working assention or if the operating agreement is scilent on a particular issue.A LLC has many tax classification to look over contingentupon the quantity of individuals, their relationship (as a couple) and theformation state.Formation of LLC : forming a LLC (limited liability company) isn’t as hard as agreat many people think.
Here are the steps you have to take to make your LLC a legitimate reality. 1. Choose anaccessible business name that conforms to your state’s LLC rules.
2. Fileformal printed material, normally called articles of association, and pay thedocumenting charge (going from about $100 to $800, contingent upon your state’sprinciples). 3. Create aLLC operating agreement, which sets out the rights and duties of the LLC individuals.4. Publish anotice of your expectation to shape a LLC (required in few of states).
5. Obtainlicenses and allows that might be required for your business. Advantages and disadvantages of LLC : Before forming a limited liability company, the businessowner or prospective business owner ought to get comfortable with theadvantages and disadvantages of a LLC and how they contrast with those ofdifferent business forms. • Comparedto sole proprietorships and partnerships. The LLC has the most preferences whencontrasted with a sole proprietorship or organization. In any case, not allorganizations are at a phase when a LLC bodes well. • Comparedto organizations. LLCs are like partnerships in that they offer limitedliability insurance to its proprietors.
LLCs additionally have less corporateconventions and more noteworthy expense adaptability. In any case, one of thedisadvantages is profits may be subject to self-employment taxes.• Comparedto limited partnerships. LLCs offer liability security to every one of theindividuals from the company, not at all like a limited partnership, which justgives liability insurance to limited partners.Management of LLC: members from a LLC might be individuals, organizations,limited partnerships, estates, associations, affiliations, partnerships, otherlimited liability organizations, or different substances, whether domestic orforeign . A LLC subsequently offers significantly more adaptability than a SPartnership in giving both limited liability insurance and go throughassessment treatment without meeting the prerequisites for choosing S Companyimpose treatment.
A LLC might be shaped with a single part in this wayfurnishing a owner with the limited liability security not offered by a soleproprietorship. At the point when there are numerous individuals, the structureis much similar to a partnership. On the off chance that the individuals are ina detached part, a manager is selected to maintain the LLC’s business everyday.
A manager-oversaw LLC is more similar to a company with a top managerialstaff and officers. A working understanding would cover the particularobligations and duties of the manager. The individuals have awesome adaptability through a composedworking consent to characterize their separate rights and obligations, forces,benefit and misfortune sharing courses of action, and rights or limitations onexchanging possession interests.
Certain essential privileges of individuals can’t be changedand different rights might be changed just by a written operating agreement. Onthe off chance that no working understanding is readied, state LLC Acts contain”default” arrangements that will apply. These miss the mark regardingthe detail secured by an all-around arranged working understanding and don’tcover numerous basic arrangements individuals would for the most part requirein a written operating agreement and may not mirror the expectations of theindividuals on how they would structure their relationship or particular rightsand commitments. – Officers : A LLC isn’t required to have officers andgenerally don’t. They are allowed and may help characterize the parts ofindividuals in a part oversaw LLC.
Liability of LLC :The limited liability protection is basicallyindistinguishable. Truth be told, many state laws simple say give that theliability of members for obligations of a LLC is the same with respect toinvestors in an organization. There are conditions in which the two investorsand members might be held by and by at risk for the obligations of acorporation or LLC, but these are not common. LLC liable to a person injureddue to a wrongful act by anyone during working time.
Example of LLC in Saudi Arabia : Kubota Saudi Arabia Co., LLC