Answer 1:

The question is concerned with the two type of enterprise which of them one is company and
another one is partnership. As a manager of business advisory firm, here depth thinking is
required. Analysis is important here for dissolution of the final outcome. Both company and
partnership has some characteristics, advantage and disadvantage. Most important issue is
whether the liability is unlimited or limited. This issue will affect the setting up running and
dissolution of the enterprise.
Company:
All around the United Kingdom there have 2.5 million registered companies. All companies
have separate rights and obligations. Earlier companys act has replaced. Now companies are
governed by companies Act 2006.though it replaced but so many section of the ACT 2006
are alike to the section of earlier companies. Companies Act 2006 aim is to provide sound,
flexible structure for UK company law and it was introduced to improve UKs
competitiveness in the twenty first century.2006 Act has some major intention and they are-
Enhancing shareholder commitment and fostering a long term approach to deal.
To adopt a think small first advance and ensure that companies are better
standardized.
Making easy way to create and run a company.
Making flexible for future as well.

Separate legal personality:
Company is considered as a legal person in its own. It does mean that it is totally separated
from legal identity of its owner. If company do any wrong thing, that responsibility will go
for company not for its owner. As alike if any person injures by a company then he or she can
sue the company but not the owner. Case will make it more clarify about the statement.
Moreover company has been limiting the liability of members. It also limited by sharing and
guarantee. If members originally purchased share of company then they do not have to
contribute anything in event of meandering up. It should be guaranteed that they going to pay
in the event and this is depend on whether company solvent or insolvent. Main legal feature
of companies separated legal entity first establish in Salomon v Salmon 1897 case. Following
case are described below-
Salomon v Salomon & Co Ltd (1897) (House of Lords)
In this case Mr Salomon had carried limited company by selling his old business. The company paid
the purchase price in three ways where he has the loan .creditors gave the security. The when
company got difficulty in that time and unsecured creditors claimed that salmon should repay all their
loans personally because Mr Salomon was the same as the company.

Held
For the case we are aware that company formed properly. According to separate legal entity we know
that company has limited liability and all responsibility will for company not the owner. So as we
know, so Mr Salomon is one person and company is another. So the case was held that company has
no more obligations to pay the money of companys debt.
http://www.hanumant.com/CompanyLaw-ByAvinash.html
Pros of company
Company considered as an independent corporate strategy. It has
separate legal entity. A company is legal person which authorised by the
case of Salomon v. Salomon & Co. Ltd. (1897 AC 22.
Limited liability also focus an advantage because company lead its own
business life a separate entitys a result member s of the company only
bound to pay the minimum value of shares by them. They are not liable
for companys debts.
Incorporated company lasting long by not depending on members.
Members can change but company will go forever till shout down its
own self. This statement principle is in the case authorized and the case
is (K/9 Meat Supplies (Guildford) Ltd., Re, 1966 (3)
Company has its own legal common seal. So all contracts made under
companys common seal which represent companys existence and its
proved of deal.
Section 82 gives appearance of the principle that Joint Stock Company
can transfer their shares which is a great advantage of the company.
Incorporated company as a separates entity can hold its own name and
identity .so not any member can claim ownership of companys assets.
If company want to sue and be sued in its own name, here member of the
company has no right to do any dely.

Cons of the company
As it is clear about that company considered as separate legal entity though it also
has lifting the veil of incorporation that is sometime necessary to look at the person
behind the corporate veil. So incorporated company also has some disadvantage
which are enlisted below for dissolution of the advice.
Determination of character is important here which can make companys
enemy. The case Daimler Co Ltd. v. Continental Tyre and Rubber Co
shows this situation.
Fraudulent and wrongful trading and also criminal offence can be happen
for disqualified directors.
Abuse of company name.
Sometime by agent or government trustee, company may be ignored.
In the circumstances of lifting veil, section 45,147 and 542 show that it can
be considered under statutory provision.

Partnership
By the Partnership Act 1890,
The relationship between persons that leads the business with vision of profit is
called partnership.
A business that includes a number of people with legal rights and liabilities and the
motive would be the profit of it. However, some professionals have their own rules
such as-Mann v D'Arcy (1968) held that one deal is enough to create a partnership.

Advantages of Partnership
As few people create the business and they will fund the business in order to
start their activity. The output depends on the amount of investment. The more
money they put into the business, the more flexibility and growth they will get
and the profit will be shared equally among them.
It is very easy to generate, manage and run a partnership business. The
flexibility is the main pros of this business model. Partners run the business as
they wish. It is not that strict like a company which is regulated by law.
Partners share the responsibility of the business in according to their skills,
ability and knowledge.
Many men many minds can be the role model of this kind of this business.
Partners help each other in decision making and problem solving of the
business.

Disadvantages of Partnership
One of the most disadvantages of partnership is the disagreements of the
partners. As partners have different ideas and point of view that turns the
business into a dissolving situation and here is a big fact of the relationship of
the partners.
As partnership runs by the agreement of the partners. So there can be less
freedoms in some cases less than a sole trade but more flexibilities than limited
companies.
One of the major disadvantages of partnership is taxation that allows the
partners to pay same way tax like sole traders. Partners must have to register as
self employed with HM Revenue & Customs.
Partners equally shares the output of the business whether the effort of an
individual in not equally fair behind the business.

http://blog.thecompanywarehouse.co.uk/2010/03/01/advantages-and-disadvantages-of-
partnership/
Difference between Company and Partnership

Few things that distinct a company and a partnership:
A company appears as an individual legal person but a partnership firm
represent as a group those who invent it.
In partnership, Property belongs to the comprising people but company
owns the company in terms of property.
A company born with the registration under the Companies Act, 1956,
while a partnership firm is a firm when it wants to be. It doesnt need any
registration.
Firm represents the partners as agent, but a firms members cannot be its
agents.
There is no contract with the partner in that firm, whereas a company have
contract with its member.
There are few things about the shares transferability. A partner wont be
able to transfer his share without the consent of other partner of the firm but
a member of a company can do it and transferee can be a member of the
company.
A firms share is unlimited to a partner but for a member it is limited by
shares or guarantee.
It is very easy to dissolve the firm being death or insolvency of a partner of
the firm unless supplied by others. On the other hand, there is no affect of it
in the life of a company.
A company is bound to be audited by the professional whereas partners do
their own firms audit.
Minimum 2 and maximum 20 is the minimum number of partners in a firm
in any business and 10 in banking business. In a private company the
minimum 2 and maximum is 50 numbers of members are allowed. In a
public company 7 is the minimum number of members and no max limit.
Law enforcement can be an issue to dissolve a company but an agreement
is enough to end up a firm.
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So from the previous discussion it is clear both side has some pros and cons.
But client who is seeking advice can start business either partnership or
company after knowing all the issues as far discussed.