Business Company Formation

In Ethiopia business companies are formulated according to the commercial code of 166 of 1960. In the commercial code of article 212   there are six forms of business organizations as follows:
1.    Ordinary partnership; 

A partnership is an ordinary partnership within the meaning of this Title where it does not have characteristics which make it a business organization covered by other Title of the code. (Art.227)
2.    Joint venture; 

A Joint Venture is an agreement between partners on terms mutually agreed and is subject to the general principles of law relating to partnerships. (Art.271)
3.    General partnership; 

A general partnership consists of partners who are personally, jointly, severally and fully liable as between themselves and to the partnership for the partnership firms undertakings. Any provision to the contrary in the partnership agreement shall be of no effect with regard to third parties.

Where the partnership is a commercial partnership, each partner shall have the status of a trader.

The partnership shall have a firm name. (Art.280)

4.    Limited Partnership;

A limited partnership comprises two types of partners: general partners in full liable personally, jointly and severally and limited partners who are only liable to the extent of their contribution. (Art.296)

5.    Share company; 

A share company is a company whose capital is fixed in advance and divided into share and whose liabilities are met only by the assets of the company.

The members shall be liable only to the extent of their share holding. (Art.304)
6.    Private limited company; 

A private limited company is a company whose members are liable only to the extent of their contributions.

A private limited company shall not have less than two or more than fifty members and is always commercial in form.

The company shall not issue transferable securities in any form.

The capital of a private limited liability company shall not be less than 15,000 Ethiopia birr. (Art.510,512)

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