On 11/05/2010, at 2:46 PM, Josh Price wrote:
To summarise: a limited company (ie Pty Ltd) is a structure which
protects you personally from any debts a company could incur
On the other hand, you have the responsibilities of a director,
which are rather extensive also. But yeah, P/L gives you some
protection, except from loss or damage caused by you being
negligent or otherwise not exercising your directorial responsibilities.
I.e. if you believed in your business plan and did all you could
reasonably be expected to to make it succeed, and yet it fails, you
don't lose your house... unless you borrowed against it or signed an
indemnity with some client... so don't do that. Purchase PI insurance
ad self-fund instead.
In a partnership, all partners are equally and separately responsible
for all liabilities incurred by any of them, and it's difficult to
legally
determine what actions were taken in the partnership and which
privately, and difficult to formally disassociate, so this tying of
liabilities
can extend long after *you* thought the business has wound up. Nasty!
Short form: don't even consider entering a partnership like this.
Clifford Heath (I'm not an accountant or a lawyer either).
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