Joint-stock stock companies Advantages: • Limited Liability • Perpetual

Joint-stock company

An organization or association comprising of people
organized to direct a business for pick up and having a joint stock  of capital spoke to by shares claimed
exclusively by the individuals and transferable without the assent of the
gathering.

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FORMATION OF A JOINT STOCK COMPANY

Stage I*

Promotion

a) Discovery of Idea

b) Investigation

c) Assembling

d) Financial arrangement

Stage II*

Registration or Incorporation

a) Preparation of MOA and AOA

b) Filing of necessary documents for Registration

c) Issue of Certificate of Incorporation

After that you should identify the types of the company,
there are two types of Joint Stock Company they are:

1- Private Limited Company                                       2-
Public Limited Company  

Thin Start Operation.

 

Advantages and disadvantages of joint stock companies

Advantages:

•             Limited
Liability

•             Perpetual
Existence

•             Large
Scale Operation

•             Transferability
of Shares

•             Raising
of Funds

•             Social
Benefit

Disadvantages:

•             Formation
is not easy

•             Double Taxation

•             Control
by Board of Directors

•             Excessive
Government Control

•             Delay in
Policy Decisions

•             Speculation
and Manipulation

 

The management of a company

The management of a company is delegated to the Board of
Directors. Directors are elected by the shareholders though some may be
nominated by special interests like debenture-holders, etc. The Companies Act
contains a number of provisions in respect of directors.

Directors must act as a Board, i.e., decisions arrived at
only at meetings of the directors will be binding except that, depending upon
Articles, and subject to Section 289 of the Act, resolutions may also be
adopted by circulation. Individual directors have no powers unless specific
powers are delegated at a properly held meeting of the Board of Directors.

The Board also has the power to appoint sub-committees to
deal with specific matters. A meeting of the Board of Directors must be held
once in every three calendar months. The Central Government has the power to
exempt any class of companies from this provision. The quorum is two directors
or one-third of the total number whichever is higher (not counting interested
directors).

 

Examples of joint stock companies in Saudi Arabia

There are many joint stock companies in the Kingdom of Saudi
Arabia such as:

•             Abdullah
Al Othaim Markets

•             Bank
Saudi Fransi

•             Jarir
Bookstore

Description of  the
General Partnership

A General partnership is the most oversimplified kind of
legal structure intended for the circumstance in which at least two individuals
are working together in some type of business movement.

General Partnerships Partners divide responsibility for
management and liability, as well as the shares of profit or loss according to
their internal agreement. Equal shares are assumed unless there is a written
agreement that states differently. In a general partnership, but profits and
losses flow through to the partner’s tax returns.

A general partnership the basic form of partnership under
common law, is in most countries an association of persons or an unincorporated
company with the following major features:

 

* To be established by agreement and contract.

 * Consists of two or
more partners.

* All partners shall be equally responsible for any legal
order of the Company’s debt.

 *Partners in the
public company share equally the company’s responsibilities and obligations.

Formation and funding of the General Partnership

The partnership agreement *

General partnership created by handshake, words, either
verbal or written.

Partnership name  The
*

It can operate under name of any one or all of partners.

* Right to participate in management

All partners has rights to participate in management and has
an equal vote on partnership matters unless otherwise agreed.

Right to an accounting *

Partners cannot sue partnership but they may bring an action
for an accounting.

Partners’ rights to share in profits *

UPA mandates right to an equal share in profits and losses.

Advantages and disadvantages of the General Partnership

Advantages of a General Partnership

•             Easy to
Establish.

•             Simplified
Tax Filing.

•             With more
than one owner, the ability to raise funds may be increased, both because two
or more partners may be able to contribute more funds and because their
borrowing capacity may be greater.

•             Partnerships
provide moral support and will allow for more creative brainstorming.

Disadvantages of a General Partnership

•             No
Separate Business Entity from Partners.

•             Partners’
Personal Assets Unprotected.

•             Partners
Liable for Each Other’s’ Actions.

•             Partnership
Terminated Upon Death or Withdrawal of One of the Partner.

•             general
partnership is that all partners are personally liable for business debts and
liabilities .

Management of the General Partnership

General partners have management rights.

A general partnership is managed by the partners, but the
management rights are not required to be equal. The partners are free to enter
into a written agreement specifying the duties, responsibilities, rights,
powers and limitations of each partner. In the absence of a written agreement,
however, all partners have equal rights to manage the business of the
partnership and to enter into agreements, incur obligations, or conduct other
activities on behalf of the partnership business.

Liability of the General Partnership

General partners of a limited partnership have unlimited
liability for debts and obligations of the partnership.

the owners of a partnership have boundless individual
liability. each partner in an organization is mutually at risk for the
partnership’s commitments. Joint liability implies that the partners can be
sued a gathering. A several liability implies that the partners are
independently at risk. each partner is both mutually and severally at risk for
the harms coming about because of the wrongdoing of different partners, and for
the obligations and debts of the partnership.

of the General Partnership 
Aramco company

Saudi Aramco has entered into a strategic partnership with
Petronas Chemicals Group Berhad (PCG) to enhance the value and competitive
positioning of its petrochemicals projects within the PETRONAS(PIC) in the
southern Malaysian state of Johor.

The partnership marks a strategic, mutually beneficial
relationship that will provide PIC with high-impact strengths and synergies
from both Saudi Aramco and PCG.

Under the terms of the venture’s share purchase agreement
(SPA), signed between PCG and Saudi Aramco’s Aramco Overseas Holding Cooperative
U.A. (AOHC) subsidiary, the parties have equal ownership in PRPC Polymers Sdn
Bhd (PRPC Polymers) within PIC.

The signing of this agreement with PCG is another positive
milestone for Saudi Aramco after the signing of the SPA with PCG’s parent
company PETRONAS during.

 

Description of LP:

A limited partnership (LP) exists when at least two partners
join to together direct a business in which at least one of the partners is
risponsile of amount of money that partner has invested. Limited partners don’t
get dividends, yet appreciate guide access to the stream of salary and costs.
This term is likewise alluded to as a “limited liability  partnership” (LLP). The main advantage
to this structure is that the owners  are
commonly not subject for the debts of the organization.

Formation of LP:

All U.S. states represent the arrangement of limited
partnerships under the Uniform Limited Partnership Act, which was changed in
1985. It was initially known as the Limited Partnership Act, made in 1916 and
received by 49 states, in addition to the Region of Columbia.

To shape a limited partnership, the partners must rigester
the venture in applicable state, regularly through the office of the local
Secretary of State . It is vital to acquire all pertinent business allows and
licenses, which is depends on area, state or industry. The U.S. Small Business
Administration  records down all local,
state and federal permits and licenses important to begin a business.

Advantages and disadvantages of LP :

advantages and disadvantages of partnership are comparable
to those of a general partnership. The primary favorable position of a limited
partnership is the limited risk that limited partners appreciate, ensuring them
against individual obligation for the partnership’s obligations and different
commitments.

The limited obligation security managed limited partners
makes this a more appealing element than a general partnership in that it is
less demanding to pull in financial specialists than a general partnership
where each general partner’s personal assets are at risk.

It is in this manner far less demanding to advertise limited
partner interests as an investment, especially concerning discrete tasks, for
example, real estate improvement. Be that as it may, such limited accomplice
interests are by and large considered “securities” and will in this
manner be liable to control under government and additionally state securities
laws.

With the upside of limited risk, be that as it may, comes
the burden of not having the capacity to effectively partake in the management
of the LP.

Management of limited partnership:

A LP must have no less than one general partner and one
limited partner, yet there is no legitimate most extreme on the quantity of
either kind of accomplice. In any case,as a practical matter , the limited
partners are the aloof financial specialists who support the business wander
and the general partners are normally an individual or little, reasonable
gathering that works the business regularly. 
limited partners may be individuals, trusts, estates, or other entities.

The preservation of a limited partner’s limited liability
protection is reliant upon extremely confined rights to take an interest in the
administration of the business or have voting rights on choices of the
partnership.

A limited partner who abuses the limitation on taking part
in administration of the LP dangers losing his limited risk for partnership
obligations and commitments. Limited partners are, regardless, ordinarily given
certain voting rights as for real partnership choices, for example,

–              The
offer of all (or considerably all) of the partnership’s advantages

–              The
affirmation, expulsion, or maintenance of a general partner

The passing or renunciation of a limited accomplice does not
cause the disintegration of a LP. In any case, statutes commonly give that if a
general accomplice passes on or leaves, the LP will be broken up unless certain
conditions are met.

Liability of LP:

A limited partner who holds this status by not shamefully
taking an interest in the management of the partnership business is just in
danger for the capital added to the partnership. A limited partner has no
individual obligation for any cases against the partnership and the  limited partner’s personal assets are not at
risk.

 

Example of LP in Saudi Arabia:

Total Care Saudi Co. 

 

Limited Liability Company

 

Description of LLC:

a LLC consolidates the profitable limited liability normal
for a company with the go through tax collection of an association or sole
proprietorship. While associations and sole proprietorships stay away from
twofold tax collection as go through duty substances, they don’t offer any
limited liability security for proprietors. Correspondingly, a company offers
limited liability security yet the capability of twofold tax assessment in a C
Enterprise. While a S Company decision makes a go through expense element for
an enterprise, the assessment treatment isn’t indistinguishable to a LLC.

A LLC might be overseen exclusively by the proprietors,
called individuals, or the individuals may delegate at least one administrators
to maintain the business every day. A LLC is in this way described as part
oversaw or chief oversaw.

A LLC is shaped by recording Articles of Association with
the Secretary of State. A LLC permits individuals impressive adaptability in
deciding the organization’s management structure. This is refined through a
composed working assention among the individuals to control matters, for
example, how management will be sorted out, rights of individuals, portion and
dissemination of benefits and losses, and transferability of membership. State
LLC Acts give default arrangements that will govern if the individuals don’t go
into a working assention or if the operating agreement  is scilent on a particular issue.

A LLC has many tax classification to look over contingent
upon the quantity of individuals, their relationship (as a couple) and the
formation state.

Formation of LLC :

forming a LLC (limited liability company) isn’t as hard as a
great many people think. Here are the steps 
you have to take to make your LLC a legitimate reality.

1.            Choose an
accessible business name that conforms to your state’s LLC rules.

2.            File
formal printed material, normally called articles of association, and pay the
documenting charge (going from about $100 to $800, contingent upon your state’s
principles).

3.            Create a
LLC operating agreement, which sets out the rights and duties of the LLC individuals.

4.            Publish a
notice of your expectation to shape a LLC (required in few of states).

5.            Obtain
licenses and allows that might be required for your business.      

Advantages and disadvantages of LLC :

Before forming a limited liability company, the business
owner or prospective business owner ought to get comfortable with the
advantages and disadvantages of a LLC and how they contrast with those of
different business forms.

•             Compared
to sole proprietorships and partnerships. The LLC has the most preferences when
contrasted with a sole proprietorship or organization. In any case, not all
organizations are at a phase when a LLC bodes well.

•             Compared
to organizations. LLCs are like partnerships in that they offer limited
liability insurance to its proprietors. LLCs additionally have less corporate
conventions and more noteworthy expense adaptability. In any case, one of the
disadvantages is profits may be subject to self-employment taxes.

•             Compared
to limited partnerships. LLCs offer liability security to every one of the
individuals from the company, not at all like a limited partnership, which just
gives liability insurance to limited partners.

Management of LLC: 

members from a LLC might be individuals, organizations,
limited partnerships, estates, associations, affiliations, partnerships, other
limited liability organizations, or different substances, whether domestic or
foreign . A LLC subsequently offers significantly more adaptability than a S
Partnership in giving both limited liability insurance and go through
assessment treatment without meeting the prerequisites for choosing S Company
impose treatment.

A LLC might be shaped with a single part in this way
furnishing a owner with the limited liability security not offered by a sole
proprietorship. At the point when there are numerous individuals, the structure
is much similar to a partnership. On the off chance that the individuals are in
a detached part, a manager is selected to maintain the LLC’s business every
day. A manager-oversaw LLC is more similar to a company with a top managerial
staff and officers. A working understanding would cover the particular
obligations and duties of the manager.

The individuals have awesome adaptability through a composed
working consent to characterize their separate rights and obligations, forces,
benefit and misfortune sharing courses of action, and rights or limitations on
exchanging possession interests.

Certain essential privileges of individuals can’t be changed
and different rights might be changed just by a written operating agreement. On
the off chance that no working understanding is readied, state LLC Acts contain
“default” arrangements that will apply. These miss the mark regarding
the detail secured by an all-around arranged working understanding and don’t
cover numerous basic arrangements individuals would for the most part require
in a written operating agreement and may not mirror the expectations of the
individuals on how they would structure their relationship or particular rights
and commitments.

–              Officers  : A LLC isn’t required to have officers and
generally don’t. They are allowed and may help characterize the parts of
individuals in a part oversaw LLC.

 

Liability of LLC :

The limited liability protection is basically
indistinguishable. Truth be told, many state laws simple say give that the
liability of members for obligations of a LLC is the same with respect to
investors in an organization. There are conditions in which the two investors
and members might be held by and by at risk for the obligations of a
corporation or LLC, but these are not common. LLC liable to a person injured
due to a wrongful act by anyone during working time.

Example of LLC in Saudi Arabia :

Kubota Saudi Arabia Co., LLC