hnd商法导论outcome3

1 Case Study 1  Questions: 1. List the main business organizations recognized by Scots Law. 2. Given the fact that Lisa will be running the business herself and, for the time being, she is unlikely to be employing anyone, how would you classify her business? 3. Identify two advantages and two disadvantages of the type of business organization run by Lisa.  Key Question 1 The main business organizations recognized by Scots Law are: Sole trader, Partnership, Limited partnerships, Limited liability partnerships, Private companies, Public companies. Question 2 ① Lisa is running a very small business, so the most appropriate form of organization is sole trader. ② According to the Companies Regulation 1992, Lisa’s organization form does not fit for the condition of private company; such a private company is limited by shares or by guarantee and need only have on member. ③ As a result, we can judge that the organization form of Lisa’s company is sole trader. Question 3 Advantages: ① very basic legal requirements to comply with ② Total control over his/her business and does not have to take into account the opinions of any shareholders. ③ It is the simplest form of business organization recognized by Scots Law ④ A sole trader is to all intents and purposes to be regarded as a self-employed person. Disadvantages:

2 ① A sole trader may find it difficult to fund an expansion of the business because she/he can not offer shares to other parties in order to raise funds.(筹集资金) ② If the business fail, the sole trader is said to have unlimited liability for any debts or obligations owed to third parties. ③ The inclusion of new partners would force a change in the nature of business, operation by converting it into a partnership or some other form of corporate body. ④ (in any case), A business expansion requiring a major injection of capital might entail a loss of control over the business because new members who are a source of new finance will almost certainly demand a say in the running of the business. 以上优、缺点各选两个答即可 Case Study 2 Question 1  What are the main differences between a traditional partnership and a limited liability partnership (LLP)? Partnership Unincorporated body Partners have unlimited liability in respect of partnership debts No need to be registered with registrar of companies and no need to supply formal documents Regulated by Partnership Act 1890 LLP Corporate body Members enjoy limited liability in respect of LLP debts Must be registered with the registrar of companies and certain documents must be supplied Regulated by LLP Act 2000

3 Question 2  What are the main advantages for an existing partnership when it changes to a limited liability partnership? ① The reason why many traditional partnerships try to translate to LLP is that the members can enjoy the limited responsibilities. ② Further more, under the conditions of losing of privacy and greatering external regulation for the members, lots of traditional partnerships definitely hope to translate to LLP.(because of LLP…) Question 3  What is the nature of the legal relationship between partners in firm and members of a LLP? ① There exist a fiduciary relationship in law relationship between company and partners. ② 举例说明公司与成员之间的忠实关系 Pillans Brothers v Pillans [1908] ③ According to Limited Liability Partnerships Act 2000, section 6 regulations, there should be recognized to an agent’s relationship between members and LLP. ④ The general rule of the law agency that an agent (member) must always act in the best interest of his principal (LLP). ⑤ A member is not an agent of his fellow members. Case Study 3 Question 1  What is a company’s objects clause? ① Object clause 是存在于Memorandum of Association 之中的。 ② Object clause 通常是公司的成立目的并且列出了公司可以从事的商业或商事行为。 ③ Before the reforms introduced by the Companies Act 1989, 公司无权与第三人签订任何商业协议，除非公司的object clause有明确规定。

4 ④ 假如公司 object clause 没有授权公司去从事某项商业交易时，则公司就没有行为能力（lack of capacity）去订立合同，并且第三方也不能抗辩（third party was no defence）. ⑤ Nowadays, many companies will have straight forward objects clauses which allow them to enter into any type of business of commercial transaction whatsoever. Question 2  Does MacGregor have the right to withdraw from the project with Constructit? ① Macgregor 没有权力撤销它与Constructit 之间的协议。 ② As a result of reforms introduced by the Companies Act 1989, Section 35 of the Companies Act 1985 now states that every contract is enforceable against the company. ③ No act done by a company may be questioned by the fact that it was beyond its legal capacity as stated in its objects clause in the Memorandum of Association. ④ Section 35B of the 1985 Act goes on to say that there is no necessity for a third party to check that a proposed contract is within the powers of the company as per the Memorandum of Association. ⑤ The Section 3A of the company Act 1985 now permits a company to have a simplified objects clause which means a company can enter into practically any contract whatsoever with third parties. ⑥ In situation where third parties dealing with the company here failed to act in good faith and where the Directors have exceed their authority, Section 35A, Companies Act 1985 raise the possibility that such an ultra virus (毒树之果) contract may be declared voidable by the company. ⑦ 举例 Ashbury Railway Carriage & Iron Co v Riche [1875] Question 3  Will the legal action by MacGregor shareholders be successful so that the company will be forced to pay out the expected bonuses? ① 根据Companies Act 1985, Section 14中的规定，公司当中最重要的两个文件分别是Article of Association & Memorandum of Association. 股东是否有权利分红（receive bonuses）完全取决于公司的Article of Association 的规定。