13/08/2024
TODAY, LET ME SHARE WITH YOU THE DIFFERENCE BETWEEN A COMPANY AND A BUSINESS.
All they are trading vehicles but they different when it comes to operation.
COMPANY versus BUSINESS
⭐️⭐️A Company ⭐️⭐️
Is a commercial enterprise incorporated under the Companies Act, 2004, and has the following features:
👉A legal entity separate and apart from its members.
👉Enjoys limited liability, that means, the liability of a member is normally limited to the extent of the unpaid amount on his shares in the company.
👉Enjoys perpetual succession, i.e., a change in the membership does not affect the existence of a company.
👉Being an artificial entity it can only be managed by natural persons called directors
👉Property is owned by the company and not by individual members..
👉Must be wound up in accordance with the Companies Act.
👉Members are not agents of the company
⭐️⭐️A Business⭐️⭐️
Is a commercial enterprise registered under the Registration of Business Names Act, 1934.
👉You may register as a sole trader, partnership, a company carrying on business in name other than its corporate name, or an overseas company carrying on business.
A Business has the following features:
It is not a separate legal entity (ie. there is no separate existence distinct from its owners).
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🫵It does not enjoy limited liability (partners are liable jointly for the contractual liabilities and obligations of the partnership).
🫵Does not have perpetual succession 🫵A change in the membership affect its existence
🫵All partners may take part in the management of the partnership.
🫵Property belongs to the proprietor or partners in common or as determined by their agreement, if any.
Can be dissolved by a partner simply giving notice.
🫵Partners are agents of each other and the partnership.
