business name), then the organisation must comply
with the requirements of the Companies Act 2006. This
will be dealt with in more detail in later chapters, e.g.
Chapter 5 , but it contains provisions restricting the
choice of the business name. For example, a name must
not be chosen which suggests a connection with central
and local government unless BERR consents. This is to
prevent the public getting a possibly false sense of secur-
ity because these government authorities get a regular and
safe income from taxes and Council Tax and business
rates. There are also requirements regarding disclosure
of the name during the lifetime of the business.Limited liability partnerships
Those wishing to trade as a limited liability partnership
(LLP) must send an incorporation document to the
Registrar of Companies. If the Registrar is satisfied that
the requirements for registration have been complied
with the incorporation document will be registered and
the Registrar will give a certificate that the LLP is incor-
porated. From the date of the certificate the members
can trade through the medium of the LLP. Trading
before that date could be construed as trading through
an ordinary informal partnership governed by the Part-
nership Act 1890. An existing ordinary partnership
converting to an LLP would until incorporation trade
under its existing partnership articles and the 1890 Act.
These matters apart, the above material relating to other
partnerships applies.Companies
A private company cannot trade until its application
for registration has been dealt with by the Registrar of
Companies and he has given the company a certificate of
incorporation.
The Companies Act 2006 requires public companies
to have an authorised and issued share capital of at
least £50,000 in nominal value, of which at least one-
quarter has been paid plus the whole of any premium.
This is essential so that the company can trade and/or
borrow.
All business is carried out in the name of the company
which will normally register for VAT. The choice of the
corporate name and a business name, if the company
uses one, is controlled by the Companies Act 2006, and
this Act provides also for publicity to be given to the
name. These matters will be dealt with in Chapter 6.Part 2Business organisations
78
from time to time. It would be very difficult to transfer
all this property to the new holder of the office on the
death or retirement of the civil servant who is in fact the
Public Trustee. So the person who holds the office of
Public Trustee is the sole member of a corporation called
the Public Trustee and the property over which he has
control is transferred to that corporation and not to the
individual who is the holder of the office.
The Public Trust Office was abolished with effect from
1 April 2001. From that date, the work of the Public
Trust Office was transferred to the Office of the Official
Solicitor. The two posts of Official Solicitor and Public
Trustee are now held by the same individual but the two
posts have not been amalgamated and trust work can be
undertaken in either capacity depending on administrat-
ive arrangements. The corporation sole principles still
apply to the individualwho holds the joint office. He
is, in effect, a member of a corporation sole, either the
Official Solicitor or Public Trustee.
Survey of types of business
organisation: advantages and
disadvantagesThe major advantages and disadvantages of the various
forms of business organisation in the private sector will
now be looked at under the headings set out below.
Commencement of business
Sole traders and ordinary and limited
partnerships
These organisations can commence business merely by
opening the doors of the premises. It is usual to register
for Value Added Tax, though this is not compulsory
unless the turnover of the business is at registration level
(currently more than £67,000), and of course the premises
which are being used must, under planning and other
regulations, be available for business purposes. Planning
requirements are considered later in this chapter.
If the organisation is not using the name of its pro-
prietor(s), but using a business name, as where Freda
Green trades as ‘London Fashions’ (the business name),
or Fred and Freda Brown trade as ‘Paris Fashions’ (the