Company Formation & Constitutions - 10% Flashcards
Limited company
- can be limited by shares/ guarantee
- members liability limited only not company’s
- two types private & public
Private company
May not offer shares to the public
99% of all registered companies in the uk
Off the shelf companies
The alternative way of setting up a company is to buy a commonly which has already been registered. This called buying a company off the shelf
Public company
- may offer shares to the public
- not all pics are listed on the stock exchange market
Unlimited company
- members do not have limited liability
- can only ever be a private company
- reduced discourses and may purchase shares from members easily
Advantages of off the shelf companies
- speed - avoids lengthy restriction process
- cost - often costs as little as £30
- administration - all forms have been completed by someone else
What is an article of association
The articles provide the basis of a company’s constitution. They define the rules and regulations governing the management of the affairs of the company. The rights of the members and duties and powers of the directors
What are the content of articles
- appointment and dismissal of directors
- powers, responsibilities and liability of directors
- directors decision making
- administering general meetings
- dividends
- communication with members
- class meetings
- issue of shares
- transfer of shares
- documents and records
- company secretary
The constitution as a contract lender v lushington & eley v positive overment security life assurance co
Members to company/ company to members
- in their capacity as a member
- not in any other capacity e.g member is company solicitor
The constitution as a contract rayfield v hands
Member to members
The articles bind the members to each other
Supplements to other contracts
If any outsider makes a separate contract with the company which is silent on a point covered in the articles, the articles can form part of the contract on that specific point
