Basically there is an act based on business registration. According to this law, the law governing partnership in Sri Lanka is the English law which consists of the Partnership Act of 1890. According to the law, a partnership is the relationship existing between persons carrying on a business in common with a view to profit. Say no to plagiarism. . Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an Original Essay The main selling point of property bonding is the ability to raise more funds. This means they could have up to 20 partners under one law. Borrowing power is high due to multiple owners. From time to time companies need more money. So it may be beneficial to bring multiple partners together in the business. Among the partners there will be skilled people who will use their knowledge, skills and attitudes for the success of the company. Additionally, at the individual level partnerships are taxed. No corporate income tax is imposed on the income of a partnership. Income from the partnership passes to the partners and is taxed on their individual (or corporate if the partner is a corporation) tax return. According to the scenario Fernando and Perera want to start a restaurant. Suppose the partnership documentation must be filed with the state. At the end of the year Fernando and Perera's restaurant will have to submit its tax return. There are no taxes assessed on the partnership statement. The income from the partnership is split between Fernando and Perera and each reports their share of the income on their individual tax return and pays taxes through their individual return. Even stronger in a partnership there are also weak points. The first concerns liabilities. The liability of the partners is unlimited and any debts of the company may have to be covered by themselves. And even when one partner dies the partnership dissolves. This will result in other partners having to share the company's losses and liabilities. The other weakness of a partnership is the difficulty of liquidating or transferring the partnership to others. A company which has limited liability to a certain value to the members is known as a limited liability company. The formal strength of a limited liability company is limited liability. This advantage comes from the fact that the company is a separate legal entity from the owners with a clear ownership structure. No personal responsibility. This offers some protection for new businesses such as Fernando and Pereras restaurant. Professionalism and prestige are the other strong points of the joint-stock company. It is a legally constituted and regulated entity. This often inspires confidence in clients that may not be present when dealing with sole traders. And fundraising is also becoming the strong point of the limited liability company. It may be easier to acquire huge credit value from banks. However, there is a lower tax rate on dividends. It may be possible to earn profits without paying the higher rate of income tax. Sometimes some tax incentives are only available to businesses, such as relief for research and development and depreciation of intangible assets. There is group relief even where more than one company. Plus HM Revenue and Customer approved share options plan with tax incentives. Similar to the partnership, the limited liability company also has some weaknesses. The fundamental one is Privacy. This means that some details and information about the company must be stored in public records and accessible to.