Addis Ababa University:

School Of Commerce
Business Law (Law3201)

Group Assignment
Department- Accounting and Finance
Section- R2A1
Members Id.

1, Belen Habtom UGR/3945/12

2, Blen Tesfaye UGR/4783/12

3, Tsion Lidetu UGR/3072/12

4, Kiruel Abera UGR/7007/12

5, Rediet Ayalew UGR/7258/12

Submitted to- Instructor Seyoum

Submission Date- August 27/2021

Business Law
Introduction
Individuals and companies regularly engage themselves in various business transactions
such as buying, and selling product, rendering services. In order for these transactions to
occur we may require the existence of business organizations. Business organization is an
entity formed for the purpose of carrying on commercial enterprises. There are 6 types of
business organizations: -ordinary partnership, joint venture, general partnership, limited
partnership, share company and private limited company. We will further compare and
contrast ordinary partnership and joint venture below.

Types of Business Organization

Ordinary Partnership: - is a type of partnership that has characteristics which aren’t
encompassed in the scope of the other 5 business organizations stated above.

Joint Venture: - is a business arrangement of two or more parties combining their resources
to accomplish a task. They form an agreement according to their desire.

Similarities
 Subjected to law

Both ordinary partnership and joint venture are business organizations that are under the
control of the general principles of law relating to partnership.

They are also governed by memorandum of association (MOA). MOA is a legal

document prepared during the formation and registration process of a company to define
relation among partners and specifies the objectives for which the company has been formed.

 Contribution

Contribution is the amount of money or asset given to a business by the partners.

Both in ordinary partnership and join venture each partner shall make his own
contribution either in monetary or non-monetary terms. Unless there is an agreement that
says otherwise in the contract, each input or contribution must be equal & of the nature &
extent.

 Association of a third party

1
Business Law
Associating third party is involving a person or entity other than the main participants.

In both cases none of the partners can introduce a third party or assign share without the
consent of the partners. Share is provided with the agreement of all of the partners. If it is
approved, one of the partners can assign share to the third party to make him/her part of the
business.

 Management

Manager is primarily hired to plan, organize, lead and control the activities of an
organization.

Both can be managed by one or more managers which act jointly to carry out the
management activity. In the case of joint manager, the decision should be made jointly
(cooperatively). Managers could be from partners or can be from external parties. If a
manager is not selected the all partners act as manager. The duty of the manager is stated in
the contract.

Differences
 Divulgation

Joint venture business is not revealed to a third party. There is no need to have publication,
registration and written form of the agreement. As a result, it is the only business
organization that doesn’t have legal (artificial) personality. In joint venture there are:

Sleeping partners these are people who not what to reveal their name as a business man

Managing partners are the ones managing the day to day activities and pretend as the owner
of the business

But in ordinary partnership the association must be revealed to the third party and the
organization has an artificial personality. And its formation shall be of no effect unless it is
made in writing.

 Dissolution.

An ordinary partnership purpose is not limited to a single project or goal it rather may be
oriented toward undefined period of time. Dissolution may be due to death of a partner,
withdrawal, bankruptcy….

Joint venture on the other hand is designed to accomplish a specific goal and may dissolve
after performance is mate or it may expire when the term fixed by MOA passes.

2
Business Law
 Restitution of contributions

In ordinary partnership, a partner who has contributed property may not claim it back in
kind; it is recorded by its value in the partnership’s account. Whereas in joint venture every
partner owns his/her contribution, unless stated otherwise in their agreement.

 Commercial business organization

A business is called commercial if it involves in any of the activities listed in article 5 of the
commercial code of Ethiopia.

Ordinary partnership cannot be a commercial business organization, and if it does then it will
be deemed as a general partnership.

A joint venture can be called commercial if it is created in order to do any of the activities in
article 5 of the commercial code.

Conclusion
Two of the six types of business organization in Ethiopia have been discussed in this
assignment.Starting from their definitions which arise from their nature. Ordinary
partnership and joint venture have their similarities and differences. Some of their
similarities can be listed in accordance to subjection to law, contribution by partners,
association of a third party and management. Since all business organizations can’t be the
same they also have differences in divulgation, dissolution, restitution of contribution,
whether they are commercial or non-commercial business organization, etc. we would like
anyone reading this assignment to put into consideration that it was done in the context of
business organizations of Ethiopia and it may not hold to be correct if it is interpreted
according to business organizations of another country.

References
Business law module of Addis Ababa University: School of Commerce

Commercial code of Empire of Ethiopia of 1960