Company Law Forms Of Business Association Flashcards
What are the forms of business associations?
Sole proprietor
Partnership
Registered Trustees
Company corporation
As regards Sole proprietorship what are the characteristics?
- The sole proprietor owns the whole business
- liable for the debts incurred
- has total control over the company
- bears the risk of the business
- take the whole profits
- and upon death the business dies
Does a sole proprietor need to register to a public registry?
A sole proprietor need not register any info on their operations or financial affairs to a public registry
As regards Partnership
What led to the arising of partnership?
- The need to raise capital
- Provision of continuity
What does partnership entail?
2 or more persons pooling their resources together so as to do business
What is the purpose of partnership?
To make profit
Does a partnership need to register their financial and membership matters at a public registry
They need not register
What is the law governing partnership in the East and North?
The Partnership Act 1890
What is the law governing Western Nigeria?
The Partnership Law of Western Nigeria 1959
What is the laws governing Partnership in Lagos
- Partnership Law of 2005
- Partnership (Amendment) Law of 2009
Why can a state make law on Partnership?
Because Partnership is on the concurrent list of the CFRN
Law for companies is on which list?
Exclusive list
What did Lagos state provide in their law different from all other states?
Introduction of limited liability partnership
What did Lagos state deal with in terms of partnership?
General partnership
Limited partnership
Limited Liability Partnership
Which section of the Partnership Law of Lagos defines partnership?
Section 3
What was the definition of partnership in the law?
A relationship existing between 2 or more persons (partners have the right to participate) who carry on business in common with a view to make profit
What is the maximum number of partners?
20
Who partake in profit sharing?
All partners
In section 4 partnership doesn’t merely exist because ?
because of joint tenancy, tenant in common or by sharing of gross return
Exist because of what also?
Receipt of share or profits is prima Favour evidence of him being a partner
What is a collection of partners called?
A firm
Who is a partner to the firm?
An agent with actual/ apparent authority
Which section provides rules determining the interests of partners in the firm as well as their rights and duties
Section 25 Partnership Law
The first right/duty
Entitled to share equally in profits
2.
Must contribute equally
3
Entitled to be indemnified
4
Interest at rate of 5% for payment beyond agreed amount of capital
5
Not entitled to interest on capital toll profit are ascertained
6.
Entitled to partake in management subject to limited partners
Can partners take an action against themselves?
Yes
When will a partner not be able to take action?
1.
When no partner’s right has been infringed
2.
Where what is being challenged by minority partner is an issue which has already been decided by the majority
Which authority supports this?
Foss v Harbottes
Are partners liable for debt/ obligations incurred?
They are jointly liable for all debts/ obligations of the firm
Does this liability terminate upon death of a partner?
No it doesn’t
Can a partner be liable for acts done before he became partner?
No
What happened in Foss v Harbotte
The members of company sued the defendant directors for misapplying company profit.
What was held? And what rules were developed?
The action failed and
- Proper plaintiff rule and
- Majority rule principle were developed
Kind of partnership include?
General partnership
Limited partnership
Limited Liability partnership
As regards general partnership what do partners do
They act on behalf of others
If a one partner incurs expenses what happens
He incurs it on the behalf of all of them
In this type of partnership the registration of the business name is under?
Part B CAMA
As to limited partnership
What is the maximum number of partners?
20
What does it consist of?
Consist of one or more persons called general partners who are liable for all debts/ obligations of firm and
One or more personals called limited partners who won’t be liable for debts/ obligations of firm beyond current amount agreed to be contributed and have actually contributed at time of entering the partnership
Who must this partnership be registered with?
Must be registered with Registrar of limited partnership
If not registered by the registrar what happens
It automatically becomes a general partnership
As regards limited liability partnership, where is this partnership only available in?
Partnership (Amendment) Law of Lagos
What section?
Section 58 to 84
S.58(2)
Limited liability
Is a limited liability partnership a separate legal person?
Yes
By what section?
S.58(4)
What does limited liability partnership entail?
If the business incurs liability such liability is limited to assets of the partnership and not that of the partnership
What was the English concept of limited partnership
There must always be at least one partner beating weight of liability to the extent of his personal assets
What is another inhibiting factor of limited partnership
He doesn’t have distinct corporate personality separate from individual partners
Another feature of LLP
Has a corporate legal personality which can sue and be sued
Who are partners to the firm?
Agents of the firm but are not capable of binding other partners
As regards Registered Trustees
Who are trustees?
They hold real/ personal property for the benefit of beneficiaries
Real benefit of property accrues to?
Beneficiaries
What is a registered trustee partnership about?
A trust used to enable unwieldy bodies and associations to attain corporate status
Which statute regulates this type of partnership?
Part C CAMA
What does the statutes provide?
Provides for a community, association, club or group to be registered as Registered Trustees for the pursuit of the object of the association or group so configured
What does section 26 CAMA provide?
A company with object to furthering some educational, scientific, ecclesiastical or other charitable object must be registered as a company limited by guarantee
What does this provision mean?
The organization isn’t strictly viewed as a trust but rather a company
What will then apply to the organization ?
The provisions of CAMA relating to operation, supervision, investigation and winding up of companies
This trust structured organization under CAMA derives legal regulations from 5 places
1?
CAMA provisions
2.
Constitution of organization
3.
Provision of Trustee Investment Act 1962
4.
Principle of Company Law and Equality formulates by courts on status, roles , duties, and responsibilities of trustees
5.
Internal rules, bye laws , code of conducts and operational manuals
What statute defines Incorporate Trustee?
Section 590 CAMA
What is Incorporate Trustee according to that section?
Two definitions
Where one or more trustees are appointed by any community of persons bound together by custom, religion, kinship or nationality or
Any body or association of persons established for any religious , educational, literary, scientific, social, development, cultural, sporting or charitable purpose, he or they may, if so authorized by such community / body/ association apply to the commission .. as a corporate body,
Is an incorporated Trustees a legal entity
They are and they can sue and be sued
Incorporate Trustee is a perfect example of what?
A corporate aggregate
What is a corporate aggregate?
A collection of individuals united into one body under a special denomination, having perpetual succession, under artificial form, and vested by policy of law with the acting capacity in several aspects as an individual
What section list people that can be disqualified from being trustees?
Section 592 CAMA
Who are disqualified from being trustees?
Infants
Persons of unsound mind
Undischarged bankrupt
Convicted of fraud/ dishonesty
Duties and responsibilities of Trustees
1.
Must perform his obligations
Comply with the terms of the trust deed s
