1, list and discuss the types of business organization under the new commerical code of ethiopia. (hint,nature, diffference,similarity, etc )
* Your work shal include introduction,conclusion,and reference.
minimum seven page or maximum ten page.
Introduction:
The business landscape in Ethiopia is governed by the New Commercial Code, which provides a legal framework for different types of business organization in the country. These organizations have their own unique characteristics and are suitable for different types of businesses. In this paper, we will discuss the different types of business organization under the New Commercial Code of Ethiopia, including their nature, differences, similarities, and other important aspects.
Types of Business Organization under the New Commercial Code of Ethiopia:
1. Sole Proprietorship:
- A sole proprietorship is the simplest form of business organization and is owned and operated by one individual.
- The owner has unlimited liability for the debts and obligations of the business.
- It is easy to set up and has low administrative costs.
- The owner has full control over the business and retains all profits.
2. Partnership:
- A partnership is a business organization where two or more individuals come together to carry on a business.
- Partners have joint and several liabilities for the debts and obligations of the business.
- There are different types of partnerships, including general partnerships, limited partnerships, and limited liability partnerships.
- Partnerships are governed by a partnership agreement, which outlines the rights and responsibilities of each partner.
3. Limited Liability Company (LLC):
- A limited liability company is a hybrid form of business organization that combines the features of a corporation and a partnership.
- Members of an LLC have limited liability for the debts and obligations of the business.
- An LLC is a separate legal entity from its owners, which provides protection to the owners' personal assets.
- An LLC can have a single member or multiple members.
4. Joint Stock Company:
- A joint stock company is a form of business organization where the capital of the company is divided into shares.
- Shareholders have limited liability for the debts and obligations of the company.
- Joint stock companies are governed by a board of directors, who are elected by the shareholders.
- Joint stock companies can be private or public.
5. Public Enterprises:
- Public enterprises are business organizations that are owned and operated by the government.
- Public enterprises are established to provide essential services to the public, such as transportation, communication, and utilities.
- Public enterprises are governed by specific regulations and have a social responsibility to serve the public interest.
Differences and Similarities:
- Sole proprietorships and partnerships have unlimited liability, while LLCs and joint stock companies have limited liability.
- LLCs and joint stock companies are separate legal entities from their owners, while sole proprietorships and partnerships are not.
- Partnerships and LLCs are governed by partnership agreements, while joint stock companies have a board of directors.
- All types of business organizations are required to comply with the New Commercial Code and other relevant laws and regulations in Ethiopia.
Conclusion:
The New Commercial Code of Ethiopia provides a legal framework for different types of business organization in the country. Sole proprietorships, partnerships, limited liability companies, joint stock companies, and public enterprises are the main types of business organization under the code. Each type of business organization has its own unique characteristics and is suitable for different types of businesses. It is important for business owners to choose the right type of organization that suits their needs and objectives. By understanding the nature, differences, and similarities of these types of business organization, business owners can make informed decisions about their business structure.
Reference:
- New Commercial Code of Ethiopia
- Ethiopian Investment Commission
- Ethiopian Chamber of Commerce and Sectoral Associations