company law
Task 1
The question deals with the issue of of promotion of Y Limited by X Limited(the directors are same in both of the companies according to the article of Y Limited) with the breach of pre-incorporation. After the incorporation of association company comes in existence, and starts its business after that. Before incorporation company have no legal existence, and if enters into an agreement in the name of company before incorporation, the agreement would not be valid.
The corporate personality with separate legal identity of company confirms about the limited liability of the shareholders. The concept of separate legal personality of the company is illustrated by the famous case Salomon v A. Salomon & Co Ltd (1897) AC 22 (HL)1.According to section 15(1) company Act 2006 a company becomes a separate legal person. Company can be two type : Private limited company(Ltd)and Public limited company(plc). The structure of a private limited company qualifies in two ways :1.limited by guarantee and 2.limited by share. Limited will not offer share to public2.In 1862 formation of a company required seven or more subscribers, where now company may run with one director3.The Companies Act 2006 provides that remedies are available for the breach of directors duties, remain case stated law distinct from statute law and many cases interpreting provision of past Companies Act remain relevant today.
There are some advantage and disadvantage of incorporation. A primary advantage is limited liability. This provides protection for owners to their personal assets. The ownership can change without affecting the business shareholder decides to sell the shares .There is many expenses to incorporate. Advantages must carry on with some disadvantage. One of the disadvantages of incorporation is the corporation fees and the registering the business is processed to be lengthy. Taxation also costs a corporation. Business bank accounts and records must be maintained and kept separate
The question deals with the issue of of promotion of Y Limited by X Limited(the directors are same in both of the companies according to the article of Y Limited) with the breach of pre-incorporation. After the incorporation of association company comes in existence, and starts its business after that. Before incorporation company have no legal existence, and if enters into an agreement in the name of company before incorporation, the agreement would not be valid.
The corporate personality with separate legal identity of company confirms about the limited liability of the shareholders. The concept of separate legal personality of the company is illustrated by the famous case Salomon v A. Salomon & Co Ltd (1897) AC 22 (HL)1.According to section 15(1) company Act 2006 a company becomes a separate legal person. Company can be two type : Private limited company(Ltd)and Public limited company(plc). The structure of a private limited company qualifies in two ways :1.limited by guarantee and 2.limited by share. Limited will not offer share to public2.In 1862 formation of a company required seven or more subscribers, where now company may run with one director3.The Companies Act 2006 provides that remedies are available for the breach of directors duties, remain case stated law distinct from statute law and many cases interpreting provision of past Companies Act remain relevant today.
There are some advantage and disadvantage of incorporation. A primary advantage is limited liability. This provides protection for owners to their personal assets. The ownership can change without affecting the business shareholder decides to sell the shares .There is many expenses to incorporate. Advantages must carry on with some disadvantage. One of the disadvantages of incorporation is the corporation fees and the registering the business is processed to be lengthy. Taxation also costs a corporation. Business bank accounts and records must be maintained and kept separate