C. Mis description of Company’s name:- The name of the company is most important. Usage of approved name entitles the company to enter into contracts and make them legally binding. This name should be prior approved under Section 4 and printed under Section 12 of the Act. Thus, if any representative of the company collect bills or sign on behalf of the company, and enter in incorrect particulars of the company, then such persons are to be held personally liable. Similar things happened in the case Hendon vs. Adelman[6] where signatory directors were held personally liable for stating company’s name on a signed cheque as “L R Agencies Ltd” while the original name was “L & R Agencies Ltd.” D. For investigation of ownership of company:- Under …show more content…
• A private company need not have the Certificate of Commencement of business, unlike other companies, to start its operations • Minimum paid up capital required for a private company is only ` 1 lakh • A private company is required to have only two directors and they can be permanent directors. • There need not be an audit committee of the Board of Directors for a private limited company. • It can issue deferred shares with disproportionate voting rights. Details of modifications under the Act can be read from http://www.mca.gov.in/Ministry/pdf/Draft_Notification_24062014_1.pdf Special kinds of Private companies: One person company: This type of company has been newly introduced in the Companies Act 2013. Section 2(62) quotes ―One Person Company means a company which has only one person as a member. Details of the person will be specified in the Memorandum of Association. The person will be the only member and director of the company. In several European countries and in UK, One Person Company is popular form. However, in India, the concept is
There are legislative provisions that require companies to submit various kinds of figures (tax, license, etc.) and making it an offence to fail to do so. These types of offences are known as offence specific duties to act and are not restricted to just corporate regulation: the driver of a vehicle involved in an incident causing damage or injury to any person, vehicle or animal is to provide his name and address to any person that has reasonable grounds for requiring him to do so, or report the accident to the police within 24hours . A motorist who fails to provide a police officer with a sample of breathe when required to do so also commits an offence these offences are uncontroversial providing that they respect the general principles of criminal law. At common law, offences of pure omission can also to be found, though not often. A police officer was held to be guilty of a common law misdemeanour when, without justification, he failed to carry out his duty to preserve the queens peace by protesting a citizen who was being kicked to death
Besides, section 216 of Insolvency Act 1986 restricts a director of re-using the old company’s name. Directors are prohibited from incorporating or involved in setting up a new company with the same or similar name as the old company for a period of 5 years from liquidation. This section imposes personal liability on the directors. If a person breach of this section is liable to imprisonment or a fine, or both . In order to convince its customers and creditors the company is the same entity, the directors of the original company may often change the new company name only very slightly. Thus, the scope of this section has been widened by the UK courts, applying it where the same business is conducted by the same entity and even if only one word...
This particular statute allows for corporations and such to obtain several, but not all, constitutional rights as any person or persons. In particularly own property, sue and be sued under criminal and civil law, enter contests. Moreover, because corporations and such are considerate as “person”, business has the legal rights for its debts and damages. On the contrary, persons who are employed by a particular association are liable for their own misconduct and law-breaking while acting on behalf of a corporation. In addition, corporation has rights for its own actions, has rights such as: limited free speech and to advertise their product ("The Rights of Corporations," 2009). Likewise, businesses have the responsibility to elect a CEO, provide continuity; increase profits, social responsibilities, and manages recourses effectively (“Functions & Responsibilities of a Corporation").
There are many different types of business structures, but if you own and operate a business that it is a sole
A Sole Trader is a business that is owned by only 1 person. They are
As a consequence of the separate legal entity and limited liability doctrines within the UK’s unitary based system, company law had to develop responses to the ‘agency costs’ that arose. The central response is directors’ duties; these are owed by the directors to the company and operate as a counterbalance to the vast scope of powers given to the board. The benefit of the unitary board system is reflected in the efficiency gains it brings, however the disadvantage is clear, the directors may act to further their own interests to the detriment of the company. It is evident within executive remuneration that directors are placed in a stark conflict of interest position in that they may disproportionately reward themselves. The counterbalance to this concern is S175 Companies Act 2006 (CA 2006) this acts to prevent certain conflicts arising and punishes directors who find themselves in this position. Furthermore, there are specific provisions within the CA 2006 that empower third parties such as shareholders to influence directors’ remuneration.
Salomon v Salomon was and still is a landmark case. By confirming the legitimacy of Mr Salomon's company the House of Lords put forward the concept of separate corporate personality and limited liability. Inextricably linked with this ratio is an acknowledgement of the importance of certainty within the law, thus separate corporate personality becomes a concrete principle to which the law must adhere. Salomon v Salomon is followed in subsequent cases, notably Macaura v Northern Assurance Co.[3] and Lee v Lee's Air Farming Ltd[4]. These cases highlight the reality of the separate corporate identity and take it a step further in stressing the distinction between a company's identity and that of its shareholders.
In company law, registered companies are complicated with the concepts of separate legal personality as the courts do not have a definite rule on when to lift the corporate veil. The concept of ‘Separate legal personality’ is created under the Companies Act 1862 and the significance of this concept is being recognized in the Companies Act 2006 nowadays. In order to avoid personal liability, it assures that individuals are sanctioned to incorporate companies to separate their business and personal affairs. The ‘separate legal personality’ principle was further reaffirmed in the courts through the decision of Salomon v Salomon & Co Ltd. , and it sets the rock in which our company law rests which stated that the legal entity distinct from its
The board of directors has both executive and non executive directors. Executive directors have both executive and board duties to perform while non executive directors have only board responsibilities. Therefore both types of directors vary in the responsibilities and authority they have in the company affairs. Thus the non executive directors devote very little time to company affairs ( only attend board meetings, committee meetings of which they are members or sometimes pay a visit to the company premises for getting knowledge of how things are done).
The Principle of Separate Corporate Personality The principle of separate corporate personality has been firmly established in the common law since the decision in the case of Salomon v Salomon & Co Ltd[1], whereby a corporation has a separate legal personality, rights and obligations totally distinct from those of its shareholders. Legislation and courts nevertheless sometimes "pierce the corporate veil" so as to hold the shareholders personally liable for the liabilities of the corporation. Courts may also "lift the corporate veil", in the conflict of laws in order to determine who actually controls the corporation, and thus to ascertain the corporation's true contacts, and closest and most real connection. Throughout the course of this assignment I will begin by explaining the concept of legal personality and describe the veil of incorporation. I will give examples of when the veil of incorporation can be lifted by the courts and statuary provisions such as s.24 CA 1985 and incorporate the varying views of judges as to when the veil can be lifted.
According to Corporation Act 2001 s124(1), it illustrates that ‘’A company has the legal capacity and powers of an individual both in and outside the jurisdiction” . As it were, company as a legal individual must be freely with all its capital contribution shall embrace liability for its legal actions and obligations of the company’s shareholders is limited to its investment to the company. This ‘separate legal entity’ principle was established in the case of Salomon v Salomon & Co Ltd [1987] as company was held to have conducted the business as a legal person and separate from its members. It demonstrated that the debt of company is belonged to the company but not to the shareholders. Shareholders have only right to participate in managing but not in sharing the company property. Besides ,the Macaura v Northern Assurance Co Ltd [1925] demonstrates that the distinction between the shareholders and company assets. It means that even Mr Macaura owned almost all the shares in the company, he had no insurable interest in the company’s asset. The other recent case is the Lee v Lee’s Air Farming Ltd [1961] which illustrates that the distinct legal entities between employee ad director allows Mr.Lee function in dual capacities. It resulted that the corporation can contract with the controlling member of the corporation.
Apart from that,partnership can be formed without a written agreement, but the rights and obligations will be determine by the state law
Economies of scale are the advantages that accrue as organizations become bigger and expand their activities. The firm that I chose is McDonalds. It is one of the world’s largest fast food restaurant chains. McDonald’s economies of scale allow for bulk purchase of products, faster growth, specialized management, and franchise support. Additionally, profits received and significant cost savings are a big part of McDonald 's economies of scale.
When entrepreneurs plan their business future they will consider how they can increase their business size or profit in a short period. Entrepreneurs may consider growing their business or company by using a merger or an acquisition. These methods can be a speed up tool and a short cut to enlarge their business. (Burns, 2011) Also they can reduce competition, make it easier for entrepreneurs to think about the market and product development and risk reduction. Furthermore, some lesser – known companies can improve their firm’s image and market power by using merger and acquisition with larger firms. However, there may be risks associated with merger and acquisition related to lack of finance and time. (Burns, 2011) This essay will discuss more deeply the advantages and disadvantages of using mergers and acquisitions, showing how it can affect firms and market with the case study.
Board of Directors) is expected to do an extensive research before taking such an important decision, which Andy clearly did not. Hence, Andy does have a liability under section 180(1) of the Corporations Act, since he did not take did not act with due care or diligence, which he was supposed to, being on the board of directors of the company. Further, (In Re Brazilian Rubber Plantations and Estates Ltd (1911) 1 Ch 425 at 437) Justice Neville said of a director of a company that- ‘He is not, I think, bound to take any definite part in the conduct of the company’s business, but so far as he does undertake it he must use reasonable care in its dispatch. Such reasonable care must, I think, be measured by the care an ordinary man might be expected to take in the same circumstances on his own behalf.’ In the case of (Australian Securities and Investments Commission v Healey (2011) FCA 717), it was held that, Each and every director has a cardinal role in the management of the company and is positioned at the top of the structure of the organisation. It is also a set law that the higher the position held by a person in an organisation the greater would be the responsibility on