Different business models and introduction to companies Flashcards
Case - Northern Sales (1963) Limited v Ministry of national Revenue (1973)
If there is an agreement to share losses as well as profits, this makes the existence of a partnership MORE likely
Case - Walker v Hirsch (1884)
If the person is not being ‘held out’ as a partner this makes the existence of a partnership LESS likely
Partnership Act 1890 (PA 1890)
A
s1 (1) PA 1890 defines ‘partnership’ as …
‘…the relation which subsists between persons carrying on a business in common with a view to profit’
Section 24(1) PA 1890
Profits and losses -
Section 24(6) PA 1890
Remuneration -
Section 24(8) PA 1890
Decision Making -
Section 25 PA 1890
Expulsion -
Section 19 PA 1890
The partners’ mutual rights and obligations can be varied at any time by their UNANIMOUS consent
ADD INFO FROM SLIDESHOW
Limited Liability Partnership Act 2000 (LLPA 2000)
A
Define ‘shareholders’
- Also known as Members
- Owners of the company
- Invest money in return for shares and possibility of dividends
- Not involved in day to day management but usually have voting rights and control key decisions
Define ‘Subscribers’
The name given to the first shareholders in a company who invest in the company when it is initially set up (incorporated)
Define ‘Directors’
- Office/managers of the company
- Involved in day to day running of the company
- Collectively known as the Board
- In small private companies, directors are often also shareholders
Define ‘PSCs’
- Persons with significant control
- Details of PSCs MUST be provided to Companies House
- In general, PSCs are shareholders with over 25% shares
Define ‘stakeholder’
- FIND DEFINITION
- Include anyone interested in the company, such as employees, creditors etc
Companies Act 2006 (CA 2006)
A
Case - Allen v Gold Reefs (1990)
The basic rule is that to be VALID, any alteration must be made bona fide in the interests of the company as a whole
Case - Shuttleworth v Cox (1927)
The court held that an amendment to the Articles is NOT valid if no reasonable man could consider it to be for the benefit of the company
Case - Sidebottom v Kershaw, Leese & Co Ltd (1920) 1 Ch 154 (Court of Appeal)
A
Case - Re Charterhouse Capital Ltd (2015) EWCA Civ 536 (Court of Appeal)
A
Case - Hickman v Kent
OR
Romney Marsh Sheep-Breeders’ Association (1915) 1 Ch 881 (Ch)
The generally established rule is that the Articles evidence a contract between the company and its members in their capacity as members with respect to their rights and obligations as members
Case - Eley v Positive Government Security Life Assurance Company (1876) 1 Ex D 88 (CA)
A
Case - Rayfield v Hands (1960) Ch 1 (Ch)
A
Case - Welton v Saffery (1897) AC 299
bad/old law/case or not?
Summary of process for incorporating a company from scratch
Memorandum (s 9)
Articles (unless incorporating using Model Articles)
Form IN01
Fee
Companies House
Certificate of Incorporation
Summary of process for setting up a new company using a shelf company
Shelf company purchase
Execute formalities to make the required changes to: Name Articles Registered office Members, directors, company secretary
Client’s Company
Define ‘quorum’
The number of people required to attend a meeting in order for the meeting to be valid
Define ‘quorate’
If a sufficient number of people attend the meeting then the meeting
Define ‘ordinary resolutions’
An ordinary resolution of the members of a company means a resolution that is passed by a simple majority (MORE THAN 50% of votes are cast in favour of the resolution) (s 282(1) CA 2006)
Define ‘special resolutions’
Under s283(1) CA 2006 a special resolution requires a majority of NOT LESS THAN 75%
