Introduction
There are three main business entities can choose to form in Malaysia which are Sole Proprietorship, Partnership and Limited and Unlimited Company. It is not so difficult to understand these types of entities and the owner can know which entities is more preferable to the owner. There are few steps in forming a sole proprietorship and a partnership entity. Firstly, determine the name of the organization which is unused by any business establishment or other entities. Register the business name with the local, state, or federal government. The business or organization becomes legitimate by registering which is very vital. Get all the important business documents and licenses from the local, state, or government. By doing this, …show more content…
Aaron Solomon is a business man who is manufacturing leather shoes, Mr Solomon start his business from a sole trader but one day Mr Solomon accident realise his son was interesting in doing business so Mr Solomon decide to turn his business to a limited company which is Solomon & Co. Ltd and in law a limited company is also a separate legal entity it is a legal person.
Mr Solomon own 20,001 shares out of 20,007 shares and Mr Solomon give 1 shares for his family members each person 1share. Afterwards, Mr Solomon sold his business to another large company for almost $39,000. Mr Solomon receive 20,000 shares which worth $1 each ,$10,000 in cash and a debenture for $9,000 owed by company however as result of members meeting Mr Solomon still being appoint as director of the company.
Unfortunately Solomon & Co Ltd business has dropped heavily Mr Solomon sell off his $9,000 debenture and try to solve the problem of company facing but it did not work. Due to company no money to pay to suppliers or creditor, those creditors take action appointing a liquidator to realize company asset to pay the debt owed to creditor. However the value of Solomon & Co Ltd is not enough to cover the debt because must pay the debenture first. The House of Lords held that the company is an independent person which liable its
There are three main business entities can choose to form in Malaysia which are Sole Proprietorship, Partnership and Limited and Unlimited Company. It is not so difficult to understand these types of entities and the owner can know which entities is more preferable to the owner. There are few steps in forming a sole proprietorship and a partnership entity. Firstly, determine the name of the organization which is unused by any business establishment or other entities. Register the business name with the local, state, or federal government. The business or organization becomes legitimate by registering which is very vital. Get all the important business documents and licenses from the local, state, or government. By doing this, …show more content…
Aaron Solomon is a business man who is manufacturing leather shoes, Mr Solomon start his business from a sole trader but one day Mr Solomon accident realise his son was interesting in doing business so Mr Solomon decide to turn his business to a limited company which is Solomon & Co. Ltd and in law a limited company is also a separate legal entity it is a legal person.
Mr Solomon own 20,001 shares out of 20,007 shares and Mr Solomon give 1 shares for his family members each person 1share. Afterwards, Mr Solomon sold his business to another large company for almost $39,000. Mr Solomon receive 20,000 shares which worth $1 each ,$10,000 in cash and a debenture for $9,000 owed by company however as result of members meeting Mr Solomon still being appoint as director of the company.
Unfortunately Solomon & Co Ltd business has dropped heavily Mr Solomon sell off his $9,000 debenture and try to solve the problem of company facing but it did not work. Due to company no money to pay to suppliers or creditor, those creditors take action appointing a liquidator to realize company asset to pay the debt owed to creditor. However the value of Solomon & Co Ltd is not enough to cover the debt because must pay the debenture first. The House of Lords held that the company is an independent person which liable its