list and discuss the types of business organisations under the new commercial codes of ethiopia
Under the new commercial codes of Ethiopia, there are several types of business organizations that individuals or entities can form. These organizations include:
1. Sole Proprietorship:
A sole proprietorship is the simplest and most common form of business organization. It is owned and operated by a single individual who has unlimited liability for the debts and obligations of the business. The owner retains all the profits and has complete control over the decision-making process.
2. Partnerships:
Partnerships are formed when two or more individuals come together to carry on a business with the aim of sharing profits and losses. There are two types of partnerships: general partnerships, where partners have unlimited liability, and limited partnerships, where some partners have limited liability. In general partnerships, each partner is personally liable for the debts and obligations of the business.
3. Private Limited Company:
A private limited company is a separate legal entity from its owners. It requires a minimum of two shareholders and two directors. The liability of shareholders is limited to the amount they have invested in the company. The company's shares are not publicly traded, and ownership is often restricted to existing shareholders or specific persons.
4. Public Limited Company:
Similar to a private limited company, a public limited company is a separate legal entity from its owners. However, it is subject to more regulatory requirements and has the ability to publicly trade its shares on a stock exchange. There are stricter rules regarding the governance and shareholding structure of a public limited company.
5. Cooperative:
A cooperative is an autonomous association of persons who voluntarily cooperate to meet their common economic, social, and cultural needs and aspirations. Members have equal voting rights, and profits are shared among the members based on their contributions or usage of the cooperative's services.
6. Joint Venture:
A joint venture is a temporary partnership between two or more individuals or entities for a specific project or venture. Each party contributes resources and expertise, and profits and losses are shared based on the agreement.
7. Branch Office:
Foreign companies can establish a branch office in Ethiopia to conduct business activities. A branch office is an extension of the foreign company, and it operates under the same legal entity. However, it has its own separate administration and financial reporting requirements.
It is important to note that specific rules and regulations apply to each type of business organization under the new commercial codes of Ethiopia, and it is advisable to seek professional advice when establishing a business.