HND_商法outcome3

1、Lisa has just graduated from Kirkwall College of Art and Design. She has a particular talent for designing and producing jewellery. While at College, Lisa ran a weekly stall at the local market, but she is now anxious to start a small business on a more permanent basis. Matters have been greatly hel

2、ped by the fact that she has been given a modest grant by Orkney Entrepreneurial Trust. One of the conditions of the grant is that Lisa must attend a six week course run by the local enterprise company. Part of the course deals with business organisations and gives people on the course some idea of

3、what would be the most appropriate structure for their business. Until Lisa came on the course, she had no idea that there was such a variety of business organisations.1 List the main business organisations recognised by Scots Law. sole trader partnerships limited partnerships limited liability part

4、nerships private companies public companies2 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?-pa very small business as a sole trader enterprise. pvery remote to run as a single member

5、private company in terms of the Companies (Single Member Private Limited Companies) Regulations 1992.pSuch a private company is limited by shares or by guarantee and need only have one member. passume that it has the character of a sole trader.3 Identify two advantages and two disadvantages of the t

6、ype of business organisation run by Lisa.Check the text book Case Study 2Sanjay is a qualified accountant who has been working in London for the past three years since graduating from the University of North Kelvinside. He has now returned home to Scotland in order to set up in business with three o

7、f his friends from University. All four are as yet undecided about whether they should establish a traditional partnership or a limited liability partnership (LLP). They seek your advice on the following matters:1 What are the main differences between a traditional partnership and a limitedliability

8、 partnership?Partnership Limited liability partnership Unincorporated business Corporate body No need to be registered with Registrar of Companies and no need to supply formal documents Must be registered with the Registrar of Companies and certain documents must be supplied Regulated by Partnership

9、 Act 1890 (unless the partners agree otherwise) Regulated by the Limited Liability Partnerships Act 2000 Partners have unlimited liability in respect of partnership debts/liabilities ie they are jointly and severally liable and can be pursued to their last penny Members enjoy limited liability in re

10、spect of LLP debts/liabilities ie they will only be liable to the extent of their stake in the business 2 What is the main advantage for an existing partnership when it changes to a limited liability partnership?pCurrently, many traditional partnerships have sought LLP status pbecause of the benefit

11、s of limited liability for the members of an LLP palthough a loss of privacy and greater external regulation for the members by the Registrar of Companies and tougher auditing3 What is the nature of the legal relationship between partners in a firm and members of a limited liability partnership?pThe

12、 legal relationship between partners in a firm is classified as a fiduciary信用的 relationship pPartners are agents of their fellow partners and also of the firm itself. p Pillans Brothers v Pillans 1908pSection 6 of the Limited Liability Partnerships Act 2000 - the members of an LLP = agents of the bu

13、siness and an agent (the member) must always act in the best interests of his principal (the LLP).p It is important that a member is not an agent of his fellow members. Pillans Brothers v Pillans (1908) One of the partners in a business which manufactured nuts and bolts bought another nut and bolt f

14、actory just four miles away and began to trade on his own account. Held: He had to account to the partnership for the profits made in this business. Case Study 3MacGregor Building Supplies Ltd is a very profitable business which is solely concerned with the supply of building materials for use in th

15、e construction of housing estates. About six months ago, MacGregor entered into a project with two of its long-standing business associates Buildit PLC and Constructit Ltd had approached the company with an interesting proposal. Together the three companies will build a large housing estate situated

16、 on the outskirts of Falkirk. MacGregors Chief Executive, Rob Roy has been keen渴望 on the project from the start and he convinced a majority of his fellow directors to back the new venture. Rob Roy is only too happy to ignore the fact that the companys objects clause states that its sole business pur

17、pose is the supply of building materials. Nowhere in the objects clause does it state that the company has the power to enter into contracts which involve the construction of a housing estate. However, the project has now turned into a complete disaster with Buildit being declared insolvent and it w

18、ould appear that unforeseen problems with the housing development mean that it will not be completed on time and MacGregor will make huge losses as a result.1. What is a companys objects clause?pFounding in its Memorandum of Association. psets out the purpose of the company usually in the form of a

19、list of the various commercial and business activities that it is likely to undertake.pBefore the reforms introduced by the Companies Act 1989, companies could not enter into certain contracts with third parties unless such a commercial transaction was listed in the objects clause pSuch an unauthori

20、sed contract was void by reason of the companys lack of capacity to enter such an agreement in the first place and ignorance of the contents of the objects clause on the part of the third party was no defence. pNowadays, many companies will have straightforward objects clauses which allow them to en

21、ter into any type of business or commercial transaction whatsoever.Question 2Does MacGregor have the right to withdraw from the project with Constructit?-pSection 35 of the Companies Act 1985 now states that every contract is enforceable against the company.pSection 35B of the 1985 Act goes on to sa

22、y that there is no necessity for a third party to check that a proposed contract is within the powers of the company in MemorandumpIn situations third parties failed to act in good faith and where the Directors have exceeded their authority, pSection 35A: Companies Act 1985 raises the possibility th

23、at such an ultra vires越权地 contract may be declared voidable by the company. p Ashbury Railway Carriage & Iron Co v Riche 1875 Ashbury Railway Carriage and Iron Co Ltd v Riche (1875) this case the objects set out in the companys memorandum were to make and sell, or lend on hire, railway carriages

24、 and wagons, and all kinds of railway plant, fittings, machinery and rolling stock; to carry on the business of mechanical engineers and general contractors; to purchase, lease, work and sell mines, minerals, land and buildings; to purchase and sell as merchants, timber, coal, metals, or other mater

25、ials, and to buy any such materials on commission or as agents.The directors purchased a concession for making a railway in Belgium and contracted with Riche to construct the line. Was here a valid contract? The construction of a railway, as distinct from rolling stock, was ultra vires. Therefore Ri

26、ches action for breach of the alleged contract failed as it was void.This would have been the case even if every shareholder of the company had given approval - it was an act which the company had no lawful power to do.The law has since changed through Section 108 of the Companies Act 1989, substitu

27、ting a new section 35 of the Companies Act 1985. MacGregor profits have been badly hit as a result of the failed business venture and the shareholders will not be paid any bonuses on their shares this year. The shareholders are used to the regular payment of bonuses and this news goes down very badl

28、y. Some shareholders are now taking legal action to force the company to pay out the expected dividends. According to the companys Articles of Association, the shareholders do not have an absolute right to the payment of a dividend. Question 3Will the legal action by MacGregor shareholders be succes

29、sful so that the company will be forced to pay out the expected bonuses?-pSection 14 of the Companies Act 1985 pContractual binding nature of Memorandum and the Articles of Association.pin terms of the companys Articles of Association. If so, they can raise an action against the company in terms of

30、Section 14 to force payment of dividends. ppurely discretionary自由决定的 , the company suspend payment this year.p Hickman v Kent or Romney Marsh Sheep Breeders Association 1915 书上Case Study 4Angus, Euan, Jaspreet, Sam and Valerie are seriously considering going into business together. A number of diffi

31、culties have arisen which are currently preventing the creation of the new business. They have not, as yet, managed to reach an agreement, as to how their prospective business should be organised. All five agree that they should form a company, but they are not sure whether the company should be pri

32、vate or public. They are also deeply ignorant about the need to comply with any legal requirements before they can begin trading as a company. The five are unsure about how companies are run and the personal liability of each member of a company.1 List three differences between a private company and a public company.See the textbook2 Can people simply decide to set up any kind of company and begin to trade immediately?pCompanies Act 1985pRegistered with the Registrar of Companies.