Management and Control

Sole Proprietorship

In a sole proprietorship, the owner exercises complete control over all aspects of the business. The proprietor is responsible for making all strategic and day-to-day decisions, managing operations, and handling finances. This structure allows for rapid decision-making and operational flexibility but requires the owner to bear all management responsibilities alone.

Partnership

In a partnership, management responsibilities are divided among the partners, as detailed in the partnership deed. In a general partnership, all partners share management duties and decision-making authority unless otherwise agreed upon. Each partner is involved in the business’s daily operations and strategic decisions. In a limited partnership, general partners manage the business, while limited partners typically do not engage in day-to-day management but may oversee the business’s general direction.

Limited Liability Partnership (LLP)

An LLP combines elements of both partnerships and corporations. Management is conducted by designated partners who have authority to make decisions and manage the business’s operations. All partners in an LLP can be involved in management, but their level of involvement can be specified in the LLP agreement. This structure provides flexibility in management while protecting partners from personal liability.

Private Limited Company

In a private limited company, management is typically vested in a board of directors elected by the shareholders. The board oversees strategic decisions and overall management, while day-to-day operations are handled by appointed managers or executives. Shareholders have control through their voting rights but do not usually participate in daily management. The company’s Articles of Association and Companies Act regulations govern management and control.

Public Limited Company

A public limited company operates with a more complex management structure. It has a board of directors responsible for high-level decision-making and governance. Shareholders elect the board members, and the company is required to adhere to stringent regulatory and disclosure requirements. Day-to-day management is carried out by executives and managers. The management and control processes are influenced by both the company’s internal regulations and external regulatory frameworks, including the Companies Act and securities regulations.

Choosing the right business structure affects how management and control are organized. Sole proprietorships offer direct control to the owner, while partnerships and LLPs involve shared management. Private and public limited companies feature structured management with boards of directors and executives overseeing operations and strategic decisions.

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