Business law - workshop 1 Flashcards
what is an incorporated business?
separate legal entity from its owners and managers so they are not liable for the company debts
what is an unincorporated business?
ran by individuals who have not set up a separate legal entity so have full personal liability. The table below looks at unincorporated businesses.
Who benefits from unlimited liability?
Companies limited by shares and public and private and LLP
How is a partnership made?
When it compiles with the definition under the PA 1890 ‘carrying on business in common with a view to make profit’
How is a private company formed?
Must fill out an IN01 form with companies house with the memorandum and a fee.
How can the articles be amended?
special resolution with shareholders which must be passed with 75% majority
Who is considered to have significant control?
someone with more than 25% of the voting/shares rights or holds the right to remove or appoint the majority of the board of directors
How do you convert a private company to a public one?
By special resolution, then a new application to companies house.
When can the corporate veil be pierced?
Where someone who is under an existing legal obligation or liability which he deliberately evades or whose enforcement he deliberately frustrates by interposing a company under his control
if there is a conflict between the articles and the Company Act, which prevails?
Statute, always
Where do directors get their powers for day to day affairs?
The articles
When can a shareholder fall short of the limited liability protection?
If he has failed his duties because of wrongdoing.
How would you describe the memorandum of association?
A formality.
