Ways to Set up Your Business Constitution Legally
Sole Trader
No specific legally expressed business constitution is Required
Partnership
For the partnership to come into existence there must be express or implied agreement.
The implied partnership is determined by the acts of the individuals themselves.
It is likely to operate at a disadvantage because there will be a number of matters which will not have been discussed and settled beforehand.
If the parties have not made their intentions clear certain terms are implied by the Partnership Act.
This may result in disputes being settled by the courts where the result may not be satisfactory to either parties.
It is therefore advisable to have express written agreement called the “Articles of Partnership” or a “Deed of Partnership”.
The terms of the agreement would be binding on all the parties and is flexible to the extent that it can be changed by the consent of all the parties.
Companies
Must have a clear business constitution that contains at least: –
- Memorandum of Association – The company’s charter which defines its powers and basic structure.
- Articles of Association – The rules by which the business of the company is to be conducted.
P.S. Other specific needs and objectives may also be laid out within the constitution as required.
