Business companies usually take different forms depending on the number of owners, size, and the, legal requirements, and the general complexity of the organizations. Each type of business has its advantages and drawbacks, legal requirements, and management practices. The types of a particular company, therefore, describes a specific jurisdiction under which the company is expected to operate. In other words, such a company is expected to abide by all the laws provided for companies exhibiting the given form. Venturing into appropriate business activity in the UAE is one of the best ideas for becoming financially stable. However, this is dependent on the business structure one is willing to start. For the given scenario where two EAE citizens wish to start a computer repair company, it is clear that the structure or form of the business would be a Limited Partnership Company since; one is willing to invest into the market without accounting for its operations. Arguably, the type of business structure chosen for a given business organization should be based on the capital invested, legal requirements, and complexity of the of the general management process.
Based on the scenario presented, the best business form would be the Limited Partnership Company. The argument is based on the fact that; first, a company can only be formed by more than one person. Second, a Limited Partnership has active members who take part in daily operations of the business and other members who only invest their money into the market without taking part in the management process. The type of partnership is advantageous over the other forms since; the management process is natural. The partner in control of the daily activities of the business is free to make business decisions single-handedly, thus, saving on time and resources. On the other hand, this form of marketing has a few legal requirements compared to different types such as Limited Liability Companies and General Partnerships.
The proposed form of business for the scenario will only have the two mentioned owners as this meets the membership requirements for this type of activity. As allowed by Limited Partnership, one owner will finance the business and wait for the profits. Besides, the other member will not contribute the money, but take part in the daily operations of this company by making business decisions. The complexity of processes in such a company may not be too simple and also, too complicated. Since the company will be involved in computer repair, there is a need to purchase various tools needed for the same, which mare require a moderate amount of capital. On the other hand, the management process will not be complex since; the decision-making process will be on the side of one person.
Division of tasks with the organization would be both simple and complex depending on the complexity of work involved. For example, an employee in charge of receiving spoiled computers into the company may be said to be doing a simple job. However, someone involved in the actual repair of the computers must have a sophisticated knowledge on the same. Therefore, the work involved is complex. With that in mind, the financial requirement for the organization would entail all the fund needed to purchase the machines and software for repairing computers, funds for setting up and maintaining the business premises, and wages and salaries for the workers. The table below shows six forms of businesses based on complexity.
Sole Proprietorship General Partnership Limited Partnership Limited Liability Co. Public Joint Stock
No. of People 1 2-20 2-5 7-unlimited Unlimited
Citizenship Any UAE Only UAE Only UAE + Any UAE Only
Fund Sources Savings Membership fee Membership contributions Membership contributions Shares
Region/Market Small Regional Regional National International