List and discuss types of business organizations under the new commercial code of Ethiopia (hint,Nature,difference ,similarity) ,etc
Under the new commercial code of Ethiopia, there are several types of business organizations. These include:
1. Sole Proprietorship: In a sole proprietorship, a single individual owns and operates the business. This is the simplest and most common form of business organization. The owner assumes all the risks and benefits of the business. The nature of a sole proprietorship is that it is not a separate legal entity from its owner, meaning the owner is personally liable for the business's debts and obligations.
2. General Partnership: A general partnership is formed when two or more individuals come together to carry on a business for profit. Each partner contributes to the business financially and shares in the profits and losses. The partners have equal control and are personally liable for the obligations of the partnership. The partnership is not a separate legal entity from its partners.
3. Limited Partnership: A limited partnership is similar to a general partnership, but it includes both general partners and limited partners. General partners have unlimited liability and are actively involved in the management of the business, while limited partners have limited liability and do not participate in the day-to-day operations. Limited partnerships must be registered with the appropriate government authorities.
4. Private Limited Company: A private limited company is a separate legal entity from its owners. It requires a minimum of two shareholders and limits the transferability of shares. The liability of the shareholders is limited to their capital contributions. The company is managed by a board of directors. Private limited companies have more legal formalities and regulatory requirements compared to partnerships.
5. Public Limited Company: A public limited company is similar to a private limited company, but it can issue shares to the public. It must have a minimum of five shareholders and meets certain criteria to be listed on a stock exchange. The liability of the shareholders is limited to their capital contributions.
Similarities among these business organizations include the establishment of a legal entity separate from its owners, liability protection (to varying degrees), and the ability to generate profits. They are also subject to taxation and have legal obligations to fulfill. Moreover, all these organizations require registration with the appropriate government authorities in order to operate legally.
Differences among these business organizations include the number of owners, the extent of liability protection, management structure, ease of transferability of ownership, and the ability to raise capital. Each type of organization has its own advantages and disadvantages, and entrepreneurs choose the structure that best suits their business goals and circumstances.