商法3

Case study 11. List the main business organization recognized by Scots Law.Sole trader; Partnership; Limited Partnership; Limited Liability Partnership; Private Company; Public Company2. Give 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?Lisa engages in a small business activity, the business organization which suits Lisa most is sole trader. The organization style of Lisa’s company does not mention that the business is limited by shares or by guarantee. In this case, the business organization that suit Lisa most is Sole Trader.3. Identify tow advantages and two disadvantages of the type of business organization run by Lisa优点advantages：（1）The simplest method of business organization has admitted by England.（2）Self-employed. There is no difference in laws between sole trader and other business.（3）Comply with the basic legal requirements: submit income tax returns to Inland Revenue, Business Names Act 1985 has disclosure requirements.（4）All people control the company completely, they don’t consider others opinion (shareholders, members or partners)缺点disadvantages：（1）Poor management of enterprises, and undertake unlimited liability to the third party.（2）It is hard to expand operations, and can’t to sell stock as a way to other parties financing.（3）Because of they will be asked to participate in business, so expand business operations would lead to control power to the new partners, shareholders or other members（4）The new partner, shareholder or other members provide funding, they participate in it will change the nature of business operations, and become the partnership and corporate body, such as public/private companies or a limited liability partnership.Case study 21.What are the main difference between a traditional partnership and a liability partnership?Partnership: unincorporated business needn’t to be registered with Registrar of Companies and no need to supply formal documents. They should be adjustment by Partnership Act 1890, Partners have unlimited liability in respect of partnership debts partnership undertake the unlimited liability to the partnership's debts.Limited Liability Partnership: It is corporate body and it must be registered with the Registrar of Companies and certain documents must be supplied. It should be regulated by the Limited Liability Partnerships Act 2000. The members enjoy limited liability in respect of LLP debts/liabilities.2.What is the main advantage for an existing partnership when it changes to a limited liability partnership?There are many traditional partnerships due to detect the advantages of limited partnership, even if this organization has more strict requirements on the members and would lose much privacy. For example, the company must be registered and the requirements for the company's audit should be stricter. However, the traditional from partnership to limited liability partnership makes the shareholders undertake limited liabilities and can deduce their burdens, and it also does well to income to positivity of investment.3. What is the nature of the legal relationship between partners in a firm and members of a limited liability partnership?The legal relationship between partners and the enterprises is interpreted as a fiduciary relationship. The relation between partners and the enterprises is agency relation and there are also agent relations between partners.In the case of Pillans Brothers v Pillans [1908], one of the partners in a business which manufactured nuts and bolts bought another nutand bolt factory. Just four miles away and began to trade on his own account.The court held that he had to account to the partnership for the profits made in this business.From the case, we can know that the legal relationship between partners in an enterprise is interpreted a fiduciary relationship. Section 6 of the Limited Liability Partnerships Act 2000 states that the members of an LLP are to be regarded as the agents of the business and it is a general rule of the law of agency that an agent (the partners) must always act in the best interest of his principal. However, which must be indicated is that a member is not an agent of his fellow members.Case study 31.What is a company’s objectives clause?A company’s objects clause can be f ound in from its Memorandum of Association. A company’s objects clause is based on the list explain the company could engage in commercial activities or business behaviors. Before reforms of the Companies Act 1989, company could not entered the commercial and business which were not listed in the object clause, the contract would be void because of the com pany’s lack of capacity to enter such an agreement and if the third party was harmed for ignoring the contract of the object clause ,there was no defence . Now, many companies would directly in the object clauses stipulate the company could undertake any form of business activities or trading to avoid these restrictions.2.Does MacGregor have the right to withdraw from the project with Constrctit?MacGregor Company has no right to cancel the contract relationship with Constructit. According to the Section 35 of the Companies Act 1985, establish the contract and not be recognized as in vain when the company exceeds the Memorandum of Association of objects clause. Section 35B of the Companies Act 1985 goes on to state that there is no necessity for the third party to check that a proposed contract is within the company’s Memorandum of Association. Moreover, section 3A of the Companies Act 1985 now permits a company to have a simplified objects clause which means a company can enter into practically any contract with the third party. Only when the company’s dealing with the third partners has failed to act in good faith and the company’s directors have exceeded their aut hority, can the contract be voided according to the ultra vires rules.In the case of Ashbury Railway Carriage & Iron Co v Riche [1875], the directors of Ashbury Railway Carriage and Iron Co Ltd purchased a concession for making a railway in Belgium and contracted with Riche to construct the line, but the construction of a railway was not listed in the company’s Memorandum of Association, it was ultra vires. The court held that Riche's action for breach of the alleged contract failed as it was void.In our case study, MacGregor entered into a project with two of its long- standing business associates-Buildit PLC and Constructit Ltd to build a large housing estate. Nowhere, in the objects dose it state that the company has the power to enter into contracts which involve the construction of a housing estate. But Section 3A of the Companies Act 1985 now permits a company to have a simplified objects clause which means a company can enter into practically any contract with the third party. So MacGregor has no right to withdraw from the project with Constructit.3.Will the legal action by MacGregor shareholders be successful so that the company will be firced to pay out the expected bonuses？According to the Section 14 of the Companies Act 1985, when the shareholder established the company shall be in Articles of Association engage whether could get bonus. If have agreed to share out bonus, so the company's shareholders can accord to the seciton14 to lodge a complaint and request the bonus. On the other hand, if stipulated the dividends are arbitrary not forcible then the company can be resolved don't share out bonus this year.In the case of Wood v Odessa Waterworks Co [1889], the articles of a company required the company, if it declared a dividend, to pay it in cash. The company passed a resolution to pay a dividend by issuing debentures rather than paying cash.From the case, we can know the memorandum and articles are regarded as forming a contract between the company and each member.Case Study 41.List three differences between a private company and public company.The main characteristics of a private limited company are: (任选三个)1 the shares in a private limited company can not be traded or listed on the stock exchange2 there is no upper age limit for directors.3 Trading can start as soon as a Certificate of Incorporation is obtained.The main characteristics of a public limited company are: (任选三个)1 a public company must have minimum issued share capital of at least 50,0002 shares can be listed on the stock exchange and can be traded.3 directors must retire when they reach the age of 702.Can people simply decide to set up any kind of company and begin to trade immediately?According to the Companies Act 1985, the company must go to Registrar of Companies to register and send the Memorandum of Association and the Articles of Association. These two documents are illustrating the nature and movement way of the company to the Registrar of Companies. So when the company hasn't allowed, that to say has not been approved, and would not unfold transaction activity. Any new company must be get Certificate of Incorporation from Registrar of Companies then will be recognized the company has been established. The company must accord to the Companies Acts 1985 Section117 to get Certificate of Trade then conduct business transactions.3.What kind of legal status is a company said to have?When the company was allowed to register that means the company has legal personality. According this rule, company was recognized as a legal personality, also the artificial legal person, with other shareholders or members distinguish and have separate corporate personalityIn the case of Salomon v Salomon & Co Ltd [1897], Salomon transferred his business to a limited company and he and other family members subscribed the company’s memorandum. Salomon took ￡20,001 shares and the other 6 members took one share each. However, the business was not successful and ended up with liabilities of￡7,733. The company’s liquidator claimed that the company’s business was still Salomon’s. The House of Lord stated that a company i s a legal person independent and distinct from shareholders and managers. So we can see Salomon should still be liable for debts.From the case study we can know a company is a legal person independent and distinct from shareholders and managers.4.What management body is responsible for the day-to-day running of a company?According to the Companies Acts 1985, The Company daily management institution shall is the company's board of directors.5. What is the most common style of liability for company members?Members of the company undertake the responsibility in the company is Limited liability. Limited liability company's "limited" explained the company's members undertake the limited responsibility. If the company’s members are limited by guarantee, such as: private companies, the members should be liable to the company’s creditors for an agreed sun of debts.。