Professional Documents
Culture Documents
- A corporation is a separate legal entity from its owners. A partnership is a business entity with
individuals who share the risk and benefits of business.
- Corporations and partnerships differ in their structures. Corporations are more complex with more
people in the decision-making process. A partnership is a business in which two or more individuals share
ownership.
- Corporations are more expensive and complicated to form than partnerships.
- In partnerships, the general partners are held liable for all company debts and legal responsibilities.
Corporations, on the other hand, do not hold individuals liable for the company's debt or legal obligations.
The corporation is considered a separate entity and therefore the corporation itself is responsible for
assuming all debts and legal fees, and the shareholders are not at risk of losing personal assets.
5. How many types of companies exist under the Bosnian Legal System?
Bosnian law basically differentiates between business organizational forms which have the characteristic
of a partnership (drutvo lica is the general term for partnership) and those which have the characteristics of
a corporation (drutvo kapitala).
The corporate forms are:
limited-liability company (drutvo sa ogranienom odgovornosti - d.o.o.),
joint-stock company (dioniko drutvo- d.d.), which can be of the closed and open type, whose
shares are issued through public offer, and which meets one of the criteria provided for by law,
The partnership forms are:
general partnership (drutvo sa neogranienom solidarnom odgovornosti d.n.o.), and
limited partnership (komanditno drutvo k.d.), which can be an ordinary limited partnership
and limited stock partnership (komanditno drutvo na dionice), if its subscribed capital is distributed
to shares.
16.Joint Stock Company form of business organization is suitable for every type of business. Do you
agree? Give reasons.
Yes, I agree. Joint stock company is suitable:
- if large scale operations are to be undertaken
- when greater managerial skills are needed
- for an organization which intends to exist for a long period of time
- when greater capital is required
- when owners want to have limit the liability to control losses
- for both manufacturing and trading unit as well as service industry.
- for financial and corporate sector organization
If, from the very beginning, it is impossible to carry out what has been agreed then frustration
applies and the contract is void.
In practice, many events which can cause frustration are dealt with in contract in clauses know as
force majeure clauses. These usually say that things like strikes, war, epidemics, government restrictions etc.
will allow the parties to suspend or cancel the contract. This is to avoid the time and expense of having to
go to court.
26. What are the different ways in which a contract can be discharged?
A contract can be discharged in 4 ways, by:
1. Performance
2. Agreement
3. Frustration
4. Breach
In general, the management is subject to a wide range of different statutory duties, inter alia:
- to maintain accounts;
- to convene the assembly meetings and determine the proposed agenda for such meetings;
- to set a date for: determining a list of company shareholders entitled to receive notice;
determining dividend amount; determining dividend payments; voting and other questions;
- to deal with other matters stipulated by the articles of association or by the contract
In general, although the company is liable to third parties for damage caused by its employees, it may
receive compensation from individual members of the board who caused damage, if they acted intentionally
or negligently, or if the damage was caused as a result of their misconduct.
The company will have to compensate the member of management for all founded expenses if he was
successful in such litigation, and the member of management can bring a claim against the company if it
does not comply with this obligation.
The court may imply a term from any of the following sources:
- Collective agreements;
- Statute;
The date on which the employees continuous employment began. This may not be the same
as 2 above if, for example, the employee was already employed by the same employer but in
a different post. The length of continuous employment is crucial to rights relating to unfair
dismissal and redundancy, which are discussed below;
Pay entitlement;
Hours of work;
Any pension rights (unless these are controlled by a statute which itself ensures notification);
The title of the employees job and a brief description of what it involves;
If the job is not intended to continue indefinitely, the period for which it is expected to last,
or the date it is intended to end if it is for a fixed term;
34. The law of tort: employers civil liability for industrial injuries
Two possible rights of action in tort may be open to an employee injured at work:
35. The major differences between a Partnership and Limited Liability Company are:
The main difference between a partnership and an LLC is that partners are personally liable for any
business debts of the partnership -- meaning that creditors of the partnership can go after the partners'
personal assets -- while members (owners) of an LLC are not personally liable for the company's debts and
liabilities.
36. Distinguish between general partnership and limited partnership form of business organization.
A general partnership is a company with at least two persons who are jointly and severally liable for
the companys obligations.
Such a company may have more members, and they are all jointly and severally liable for the
company obligations with their entire property.
The company is established through a memorandum of association.
- The members contributions are of equal value and may include money, objects, rights and
provided services.
- They generally equally participate in the distribution of profit and in covering losses, as well as
managing of the company.
- A limited partnership is a partnership with no less than two members: a general partner and a
limited partner, although there may be more.
- These two types of members have different status within the company.
- General partners manage the company and are jointly and severally liable for the companys
obligations, with their entire property.
- Limited partners do not manage the company and are not liable for its obligations, i.e. they are
liable only up to the amount of their contributions.
37. What are the advantages and disadvantages of a Partnerships?
Advantages:
Easy to form
Availability of large resources
Better decisions
Flexibility in operations
Sharing risks
Protection of interest of each partner
Disadvantages:
Unlimited Liability
Lack of Harmony
No transferability of share
- Agreement
- Sharing of Profit
- Unlimited Liability