Question

your job as a consultant is to write a small report advising your friend on how to start a business in UAE based on the following:

1) the legal form of the proposed company

2) ways to raise capital

3) highlight any concern on lialbility based kn selected legal form

4) any advice on how to manage tbe working capital

Answer 1

1)Legal form of proposed company

Since the person is strating the business, it is always advisable to opt for the form of business which has limited liability

LLP i.e limited liability partnership offers limited liability unlike partnership and sole proprietory firn. Hence it is advisable to start LLP

2) Ways to raise capital

LLP can raise capital through bank loan. Since interest payments are tax deductible , it will bring coat of capital down. Other sources includes partner's contribution to LLP

3) Liability of business form

Liability of partner's in LLP is limited to their capital contribution. They are not liable personally

4) Advice on working capital management

The aim should be reduce debtors and increase credit period for payment. To attract fast payments for sale company can give disount if customer paus early say in 30 days and the firm should try to get as much credit period from their suppliers