There are five types of companies under Companies Act 1965, which are incorporation companies, limitation of liability, on the basis of number of members, on the basis of ownership of companies and on the basis of control. Incorporation companies consist of statutory companies and registration companies. Statutory companies is a company that create by Act of Parliament that which is set up by the government. The characteristic of statutory companies is the company is completely own by the government and no anyone of private individual are allowed to purchase shares in the company. The major advantage is it lead to high morale among the employee and executive because less of government disruption. Statutory companies are difficult to form because it requires lengthy documentation, complicated formalities and passing of statue. Registered company is a company that set up by a normal individual. The advantage of registered company is board meeting. The meeting will be held once in three months and four times in a year while disadvantage is long closing proceedings. It purposely not easy to close down the company compare to others. It takes one to two years to completely wind up the company.
Limitation of liability classified to three companies which are companies limited by shares, companies
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The characteristics of public company are the company does not have maximum limit of members. The advantages of public company are larger funds. The capital of the company raise since they issue shares to the public through stock market. By issuing debentures and bonds from the same market, the company also can raise extra capital. The disadvantages of public company are lack of motivation. To set up a company is quite hard and between the ownership and management are separated in public company. Those of the official paid do not have any incentive to work hard to improve their efficiency of the
Corporation – “A business organization that exists as a legal entity and provides limited liability to its owners.” (Longenecker, Petty, Palich, Hoy, Pg. 205) The main advantage of a corporation is that the business liability falls onto this entity instead of the individuals that own it. The disadvantages of this organization are found mostly in its formation. A corporation is expensive to create and requires compliance with state
Control – The shareholders have control of the company. They elect a board of directors who oversee business decisions.
A company is separate from its employees, shareholders or members in that the connection between them is usually a mere contract of employment which may be terminated leaving both parties to go their own ways. The same generally applies however to those businesses which are not companies. There is also more importantly usually a separation between the company and its owners.
Enterprises are not quite the same as alternate business substances in that they can be viewed as a different legitimate element, contingent upon the laws overseeing the creation and working of the organization. There are a couple points of interest of a partnership. To start with, benefits are saddled as wage to the shareholders, not the accomplices. Second, it is anything but difficult to raise capital by issuing stock. Third, shareholders have constrained obligation (Kubasek, 2014). There are likewise a couple weaknesses related with a company. To start with, customs are required in setting up and keeping up corporate shape. Second, corporate salary is exhausted twice (Kubasek,
Spokane Industries has contracted Franklin Electronics for an 18 month product development contract. Franklin Electronics is new to using project management methodologies and has not been exposed to earned value management methodologies. Even though Franklin and Spokane have worked together in the past, they have mainly used fixed-price contracts with little to no stipulations. For this project, Spokane Industries is requiring Franklin Electronics to use formalized project management methodologies, earned value cost schedules, and schedules for reports and meetings. Since Franklin Electronics had no experience with earned value management, the cost accounting group was trained in the methodology in order to bid for the project.
And there are some advantages of a public limited company such as there is limited liability for the shareholders which mean the maximum losses that will cause are the amount that the shareholders invested in that company it won’t cause more than that so for the investor the risk is limited. Other than that the public limited company’s potential capital that they can raised is large they can raise fund by selling shares or borrow from bank. Also public limited company is easier to obtain financing because most of the banks and financial institution would like to invest to the larger company just like PLC. PLC have high continuity although the helm of company step down the company can still operating normally because shareholder can transfer their shares to anyone. There are many advantages of PLC but it still have some disadvantages for instance :PLC must make public annual financial report of the company also if the company close the liquidator must be realize the all assets to distribute to all creditors and shareholders. So the owner of Tesco are those people who bought the shares of Tesco. Furthermore, every year Tesco will held the annual general shareholders meeting. Tesco will report the annual accounts, strategic report and directors' report etc. to the shareholders in the meeting. Therefore the shareholders of Tesco can have more information and data to grasp more about
However “given the delays which can be encountered in the registration process, the promoter of a company may wish to enter into contracts `for’ the company prior to its incorporation” . An example of this may be a promoter wanting to ensure a company will have stock on hand so it will be ready to operate when its registered. He might order stock and sign the contract in the unregistered company’s name. Since a company did not exist before registration it could not sign a contract itself or appoint an agent to sign on its behalf. Therefore promoters could not be seen as the company’s agent. Circumstances such as this are problematic and raise difficult questions as to the enforceability of the contract and the availability of damages for its breech.
There are many positive ideas to support listing on the Stock Market, the opportunities to companies, in addition, by attracting foreign partners also greatly increase capital investment (Suarez and Canal, 2003). In term of the opportunity to raise funds, it can be easier than a private company because of any rules, practice, and several more factor that make standardisation, used by (The Stock Exchange of Thailand, 2008).
A company is a form of a business organization. From them companies which are formed for non-commercial purpose such as charities. It is different in terms regulation with listed companies. Charities are not public companies. Therefore they are not subject to listing rules, depending upon countries rule, they may be subject to audit. They are recognized by country’s charity authority, to operate and receive the concessions that charitable statuses confess.
Base on the summary House of lord in the case of salmon and compacts act 2006 section 16(2) and 15(1) Separate legal entity can be defined as when the company at law is an invisible and intangible artificial person created due to the incorporation of a business, and it must be treated like any other dependent person with its right and liabilities appropriate to itself. Furthermore, from a combination of sources such as section 7 and 16 of company act 2006 and insolvency act 1987, and Machen (1911). the term limited liability can be defined as when a person financial liability to the company is only limited to the sum of money he or she has invested into the firm. Hence if the company was to go into insolvency or been sued it is no longer liability to shareholder but liability to the company as an individual. Hence this definition is crucial to the examination of cases in relation to corporate veil and separate legal personality due to this terms can be expressed and used in various forms. In the case of salmon, Mr. Salomon sold his company to a new company he had set up for the purpose of protection from the companies act 1982. All the conditions were met, for example Mr. salmon and his family its now participating as member of the new corporation which consist of seven members that is require under the company act 1982. In the near future the business went into insolvent liquidation. And
In summary, the rule in the Salmon case that upon incorporation, a company is generally considered to be a new legal entity separate from its shareholders has currently continued to be the law in courts or common law jurisdictions. The case is of particular significance in company law, firstly; it establishes the canon that when a company acts, it does so in its own name and right and not merely an agent of its owner, secondly; it establishes the important doctrine that shareholders under common law are not liable for the company’s debts beyond their initial capital
Any corporation that is established/regulated by the government. They are usually created to supply a need that the private sector is not (might not be profitable). Crown corporations exist to fill in the gaps that are left by the private sector of the economy. Tasks such as delivering mail are considered not profitable to private companies. However, since it is vital in the lives of citizens, the government has decided to step up and offer the service.
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.
...onclusion, registering a business is no easy task. To create a business involves a lot of time, effort and devotion towards building a company that might even take years to become profitable. With the right business idea, plan and financing one can lay the groundwork for a successful business.
Registered Trade Union shall be a body corporate by the name under which it is registered.