Quazi-juristic Personality of Sole Proprietorships and Partnerships in Sri Lanka and its Causes and Consequences

Abstract

For healthy, sustainable and developed national market economy in any given country it is vital to have a strong small and medium scale businesses at the bottom tier in the country’s commercial pyramid and a balance array of legally different business structures; companies, partnerships and sole proprietorships. Even though both domestically and internationally high attention and extensive debates were constantly placed on company law, the focus and the importance assigned to sole proprietorship and partnership laws in local and international legal spheres are questionable? This paper examined the efficacy of the legal principles emerged and exists pertains to sole proprietorship and partnership under commercial law long ago in modern business context. Study addresses the characteristics and inherent limitations of the sole proprietorship and partnership laws due to their quazi- legal personality. Study further explored the tension between the present Sri Lankan legal framework of sole proprietorships and partnerships against the practical issues encountered by such entities. The paper originated in the principle dilemma between the significant contributions made by the sole proprietorships and partnership businesses to the national economy against the poor legal attention and priority placed for sole proprietorships and partnership laws in the commercial law domain with special reference to Sri Lanka. Study carried out by way of legal analysis of blackletter law buttressed with primary data gathered through interviews with domestic sole proprietors and owners of partnerships to exemplify the domestic legal pitfalls and lacunas pertains to the sole proprietorship and partnership laws comparative to other jurisdictions namely United States, UK, Germany and France.