Answer ALL parts of the following question:
- Xavier, Yvonne and Zoe are recently qualified electricians. They wish to set up in business together providing electrical services but are unsure as to which form of business organization will suit them best. They are considering a general partnership, an LLP or a private company limited by shares. They will all work as electricians but will share other business tasks between them: Xavier will take charge of the finances and accounts, Yvonne will be in charge of equipment including three vans, and Zoe will look after the firm’s employees. They plan to employ a part time receptionist to answer the phone, and hope to employ another electrician if the business prospers. Both Xavier and Yvonne will contribute some of the capital needed to buy the vans and other equipment, but the firm will also need to take out a bank loan. Zoe will not contribute cash but will allow the business to operate from outbuildings on her land, which she will refurbish so as to make them suitable.
- Advise the parties on whether and why a general partnership, an LLP, or a private company limited by shares, is likely to be the most appropriate form of business organization for them.
Note: you should not simply explain why your preferred option is a good option, but why it is better than the other options.
- Advise the parties on any legal steps they should take to successfully form and operate the particular type of business which you recommended to them in your answer to a) above.
- Critically examine the differences between the limited partnership and the private fund limited partnership (PFLP). To what extent do you consider that the new provisions applying to PFLPs should be applied to all limited partnerships?
The main legislative provisions that you will refer to are:
The Partnership Act 1890 (“Partnership Act”)
The Limited Partnerships Act 1907 (“Limited Partnerships Act”)
The Limited Liability Partnerships Act 2000 (“LLP Act”)
The Limited Liability Partnerships Regulations 2001 SI 2001/1090 (“LLP Regulations 2001”)
The Limited Liability Partnerships Regulations (Application of Companies Act 2006) 2009 SI 2009/1804 (“LLP Regulations 2009”)
The Companies Act 2006 (“CA 2006”)
The Insolvent Partnerships Order 1994 SI 1994/2421 (“IPO”)
