A limited company is one in which its members invest. Should the business fail, its officers and shareholders have limited liability, in contrast with sole traders or other non-limited businesses, where their owners risk losing personal assets. Before 1998, the Royal College of Veterinary Surgeons (RCVS) did not permit the ownership or running of veterinary practices by limited companies and almost all practices operated as sole traders or partnerships. Since the RCVS modified its position, a considerable number of practices have ‘converted’ to limited company status or new practices have been set up as companies, and others have been taken over by ‘corporate’ owners. In this article, Nick Openshaw explains the legal relationships between the owners of veterinary practices run by a limited company compared with those run by a partnership. In particular, he looks at the role of the Shareholders Agreement in regulating matters relating to the running of limited businesses.
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