商法導(dǎo)論outcome3答案

1、 / 22Case Study 1Questions:List the main business organizations recognized by Scots Law.Given the fact that Lisa will be running the business herselfand, for thetime being, she is unlikely to be employing anyone, how would you classify her business?Identify two advantages and two disadvantages of th

2、e type of business organization run by LisaCase Question 1The main business organizations recognized by Scots Law are:Sole traderPartnershipLimited liabilityPrivate companyPublic companyQuestion 2Lisa is running a very small business, so the most appropriate form of organization is sole trader.Accor

3、ding to the Companies Regulation 1992, Lisa s organization form doesnot fit for the condition of private company; such a private company is limited byshares or by guarantee and need only have on member.As a result, we can judge that the organization form of Lisa s company issole trader.Question 3Adv

4、antages:very basic legal requirements to comply withT otal control over his/her business and does not have to take into account the opinions of any shareholders.It is the simplest form of business organization recognized by Scots LawA sole trader is to all intents and purposes to be regarded as a se

5、lf-employed person.Disadvantages:A sole trader mayfind it difficult to fund an expansion of the business because she/he can not offer shares to other parties in order to raise funds.(籌集資金 )If the business fail, the sole trader is said to have unlimited liability for any debts or obligations owed to

6、third parties.The inclusion of new partners would force a change in the nature of business, operation by converting it into a partnership or some other form of corporate body.(in any c ase), A business expansion requiring a major injection of capitalmight entail a loss of control over the business b

7、ecause new members who are a source of new finance will almost certainly demand a say in the running of the business.以上優(yōu)、缺點(diǎn)各選兩個(gè)答即可Case Study 2Question 1What are the main differences between a traditional partnership and a limited liability partnership (LLP)?PartnershipUnincorporated bodyPartners hav

8、e unlimited liability in respect of partnership debtsNo need to be registered with registrar of companies and no need to supply formal documentsRegulated by Partnership Act 1890LLPCorporate bodyMembers enjoy limited liability in respect of LLP debtsMust be registered with the registrar of companies

9、and certain documents must be suppliedRegulated by LLP Act 2000Question 2What are the main advantages for an existing partnership when it changes to a limited liability partnership?The reason why many traditional partnerships try to translate to LLP is that the members can enjoy the limited responsi

10、bilities.Further more, under the conditions of losing of privacy and greatering external regulation for the members, lots of traditional partnerships definitely hope to translate to LLP.(because of LLP )Question 3What is the nature of the legal relationship between partners in firm and members of a

11、LLP?There exist a fiduciary relationship in law relationship between company and partners.舉例說明公司與成員之間的忠實(shí)關(guān)系 Pillans Brothers v Pillans 1908According to Limited Liabili ty Partnerships Act 2000, section 6 regulations, there should be recognized to an agent s relationship between members and LLP.The ge

12、neral rule of the law agency that an agent (member) must always act inthe best interest of his principal (LLP).A member is not an agent of his fellow members.Case Study 3Question 1What is a company s objects clause?Object clause 是存在于Memorandum of Association 之中的。Object clause 通常是公司的成立目的并且列出了公司可以從事的商

13、業(yè)或商事行為。Before the reforms introduced by theCompanies Act 1989, 公司無權(quán)與第三人簽訂任何商業(yè)協(xié)議，除非公司的 object clause 有明確規(guī)定。假如公司 object clause 沒有授權(quán)公司去從事某項(xiàng)商業(yè)交易時(shí)，則公司就沒有行為能力 (lack of capacity )去訂立合同， 并且第三方也不能抗辯(third party was no defence ).Nowadays, many companies will have straight forward objects clauses whichallow th

14、em to enter into any type of business of commercial transaction whatsoever.Question 2Does MacGregor have the right to withdraw from the project with Constructit?Macgregor 沒有權(quán)力撤銷它與 Constructit 之間的協(xié)議。As a result of reforms introduced bythe Companies Act 1989, Section 35 ofthe Companies Act 1985 now st

15、ates that every contract is enforceable against thecompany.No act done by a company may be questioned by the fact that it was beyond its legal capacity as stated in its objects clause in the Memorandum of Association.Section 35B of the 1985 Act goes on to say that there is no necessity for athird pa

16、rty to check that a proposed contract is within the powers of the company as per the Memorandum of Association.The Section 3 A of the company Act 1985 now permits a company to have a simplified objects clause which means a company can enter into practically any contract whatsoever with third parties

17、.In situation where third parties dealing with the company here failed to act in good faith and where the Directors have exceed their authority, Section 35A, Companies Act 1985 raise the possibility that such an ultra virus ( 毒樹之果 ) contract may be declared voidable by the company.舉例 Ashbury Railway

18、 Carriage & Iron Co v Riche 1875Question 3Will the legal action by MacGregor shareholders be successful so that the company will be forced to pay out the expected bonuses?根據(jù) Companies Act 1985, Section 14 中的規(guī)定，公司當(dāng)中最重要的兩個(gè)文件分別是 Article of Association & Memorandumof Association. 股東是否有權(quán)利分紅( receive bonu

19、ses )完全取決于公司的 Article of Association 的規(guī)定。假使規(guī)定可以， 那么股東可以根據(jù)Section 14 的規(guī)定去起訴并要求公司分紅(forcepayment of dividends ) 。 但是， 假如分紅的規(guī)定只是隨意的( discretionary )由公司決定， 那么公司就有權(quán)暫緩( suspend )在今年分紅。舉例(任選其一) ：Eley v Positive Life Assurance Co Ltd 1876Hickman v Kent or Romney Marsh sheep Breaders Association 1915Rayfield

20、 v Hands 1960Wood v Odessa Waterworks Co 1889Case 4Question 1List three differences between a private company and a public company.Question 2Can people simply decide to set up any kind of company and begin to trade immediately?Question 3What kind of legal status is a company said to have?Question 4W

21、hat management body is responsible for the day-to-day running of a company?Question 5What is the most common type of liability for company members?KeysQuestion 1 （ 注意看上面的題目，只用選三個(gè)寫就好）private: only one director is requiredpublic: there must be at least 2 directorsprivate: limited by shares or by guara

22、ntee need only have one memberpublic: there must by at least 2 membersprivate: there is no upper age limit for directorspublic: directors must retire when they reach the age of 70private:Audited accounts must be produced within 10 months of the end of thefinancial yearpublic: Audited accounts must b

23、e produced within 7 months of the year end （更為嚴(yán)格 )private: Trading can start as soon as a certificate of Incorporation is obtained.public: Public companies can not begin trading without having been issued with aSection 117 certificate.private: Company name must end in “ Limited ” or“ Ltd ”public: Co

24、mpany name must end in “ public limited company ” or“ PLC”private:The Article of Association of a private limited company may providefor a right of pre-emption so that when a member wishes to sell or to transfer ownership of his share he must first offer them to existing member.public: Members must

25、be free to transfer their shares as they please.private: There is no minimum capital requirementpublic: A public company must have minimum issued share capital of at least 50,000.private: The shares can not be traded or listed on the other exchange.public: Shares can be listed on the stock exchange

26、and can be traded.Case Study 1Question 1The main business organisations recognised by Scots Law are:sole trader partnerships limited partnerships limited liability partnerships private companies public companiesQuestion 2Given the fact that Lisa is running a very small business, it will almost be ce

27、rtainly run as a soletrader enterprise. There is the very remote possibility and it is very remote that a smallbusiness could be run as a single member private company in terms of the Companies (SingleMember Private Limited Companies) Regulations 1992. Such a private company is limited byshares or b

28、y guarantee and need only have one member. Nowhere, however, does it mentionthat the business is limited by shares or by guarantee and wewould, therefore, assume that it hasthe character of a sole trader.Question 3The advantages of a sole trader business are:It is the simplest form of business organ

29、isation recognised by Scots Law.A sole trader is to all intents and purposes to be regarded as a self-employed person. Inother words, no difference is made between the sole trader and his or her business; theyare legally indistinguishable.Very basic legal requirements to comply with ie submission of

30、 income tax returns to theInland Revenue and the disclosure requirements of the Business Names Act 1985.Total control over his or her business and does not have to take into account the opinionsof any shareholders, members or partners.The disadvantages of a sole trader business are:If the business f

31、ails, the sole trader is said to have unlimited liability for any debts orobligations owed to third parties.A sole trader may find it difficult to fund an expansion of the business because she/hecannot offer shares to other parties in order to raise funds.In any case, a business expansion requiring

32、a major injection of capital might entail a lossof control over the business because new partners, shareholders or members who are asource of new finance will almost certainly demand a say in the running of the business.The inclusion of new partners, members or shareholders would force a change in t

33、he nature of the business operation by converting it into a partnership or some other form ofcorporate body (public/private companies or a limited liability partnership).Case Study 2【】Question 1There are many differencesbetween a traditional partnership and a limited liability partnership(LLP), but

34、candidates should be able to pinpoint the following characteristics ofboth types ofbusiness organisation from the table below:Partnership Limited liability partnershipUnincorporated business Corporate bodyNo need to be registered with Registrar ofCompanies and no need to supply formaldocumentsMust b

35、e registered with the Registrar ofCompanies and certain documents must besuppliedRegulated by Partnership Act 1890 (unless thepartners agree otherwise)Regulated by the Limited LiabilityPartnerships Act 2000Partners have unlimited liability in respect ofpartnership debts/liabilities ie they are joint

36、lyand severally liable and can be pursued to theirlast pennyMembers enjoy limited liability in respect ofLLP debts/liabilities ie they will only be liable to the extent of their stake in thebusinessPractice NoteIt would be highly advisable to concentrate on the differences between a traditional part

37、nershipand an LLP when introducing candidates to this area of the course.Question 2Currently, many traditional partnerships have sought LLP status because of the perceivedbenefits of limited liability for the members of an LLP even if this does represent a loss ofprivacy and greater external regulat

38、ion for the members ie registration with theRegistrar ofCompanies and tougher auditing requirements.Question 3The legal relationship between partners in a firm is classified as a fiduciary relationship ie arelationship of trust. Partners are agents of their fellow partners and also of the firm itsel

39、f.Candidates should cite the following case which exemplifies the nature of thefiduciaryrelationship between partners:.Pillans Brothers v Pillans 1908The legal relationship between a member and a limited liability partnership willalso beclassified as a fiduciary relationship. Section 6 of the Limite

40、d LiabilityPartnerships Act 2000states that the members of an LLP are to be regarded as the agents of the businessand it is ageneral rule of the law of agency that an agent (the member) must always act in the bestinterests of his principal (the LLP). It is important to bear in mind that a member is

41、not an agentof his fellow members.Case Study 3Question 1A company s objects clause is found in its Memorandumof Association. The objects clause setsout the purpose of the company usually in the form of a list (sometimes a very long list) of thevarious commercial and business activities that it is li

42、kely to undertake. Before the reforms introduced by the Companies Act 1989, companies could not enter into certain contracts withthird parties unless such a commercial transaction was listed in the objects clause. Such anunaut horised contract was void by reason of the company s lack of capacity to

43、enter such anagreement in the first place and ignorance of the contents of the objects clauseon the part of thethird party was no defence. Nowadays, many companies will have straightforwardobjectsclauses which allow them to enter into any type of business or commercial transactionwhatsoever.Question

44、 2No is the simple answer. MacGregor does not have legal justification for itswithdrawal fromthe contract with Constructit. MacGregor is attempting to rely on the old ultra vires rule. As aresult of reforms introduced by the Companies Act 1989, Section 35 of the Companies Act 1985now states that eve

45、ry contract is enforceable against the company. No act done bya companymay be questioned by the fact that it was beyond its legal capacity as stated inits objects clausein the Memorandum of Association. Section 35B of the 1985 Act goes on to say thatthere is nonecessity for a third party to check th

46、at a proposed contract is within the powersof the companyas per the Memorandumof Association. Furthermore, Section 3A of the Companies Act 1985now permits a company to have a simplified objects clause which means a company can enterinto practically any contract whatsoever with third parties.In situa

47、tions where third parties dealing with the company have failed to act ingood faith andwhere the Directors have exceeded their authority, Section 35A: Companies Act 1985 raises thepossibility that such an ultra vires contract may be declared voidable by thecompany. In otherwords, the ultra vires rule

48、 comes back to haunt third parties dealing with the company whenthey act in bad faith but not in this case study.Candidates should cite the following case which emphasises the harshness of the old ultra viresrule:Ashbury Railway Carriage & Iron Co v Riche 1875Question 3Candidates must reference thei

49、r answer to Section 14 of the Companies Act 1985 ie the bindingcontractual nature of the Memorandumof Association and the Articles of Association.Theshareholders will have to establish whether they are entitled to receive bonusesin terms of thecompany s Articles of Association. If so, they can raise

50、 an action against thecompany in termsof Section 14 to force payment of dividends. If the payment of bonuses is purely discretionary,the company may well have the right to suspend payment this year.Candidates should be able to cite at least one of the following examples from caselaw insupport of the

51、ir answer which demonstrate that the relationship between a companyand itsmembers and between the members themselves is contractual in nature as per Section 14 of theCompanies Act 1985:Eley v Positive Life Assurance Co Ltd 1876Hickman v Kent or Romney Marsh Sheep Breeder s Association 1915Rayfield v

52、 Hands 1960Wood v Odessa Waterworks Co 1889Case Study 4Question 1There are numerous differences between private and public companies. It is often useful to givecandidates a list of the different characteristics of both organisations whereby they are able tocompare and contrast. Candidates are only b

53、eing asked to list three differences between aprivate company and a public company from the two lists set out below and there is plenty tochoose from.The main characteristics of a private limited company are:1Company name must end in “ limited ” or “ ltd ”.2The Articles of Association of a private l

54、imited company may provide for a right of preemptionso that when a member wishes to sell or to transfer ownership of his shares he must first offer them to existing members.There is no minimum capital requirement.The shares in a private limited company cannot be traded or listed on the stock exchang

55、e.Only one director is required.In terms of the Companies (Single Member Private Limited Companies) Regulations1992, a private company limited by shares or by guarantee need only have one member.There is no upper age limit for directors.Audited accounts must be produced within 10 months of the end o

56、f the financial year.Trading can start as soon as a Certificate of Incorporation is obtained.The main characteristics of a public limited company are:The company name must end in “ public limited company ” or“ plc ”.Members must be free to transfer their shares as they please.A public company must h

57、ave minimum issued share capital of at least 50,000.Shares can be listed on the stock exchange and can be traded.There must be at least 2 directors.There must be at least two members.Directors must retire when they reach the age of 70.Audited accounts must be produced within 7 months of the year end

58、.After incorporation, trading cannot begin until a“ trading certificate ” is issued by the Registrar of Companies upon satisfaction of the nominal value of share capital. Thistrading certificate is referred to as a Section 117 certificate after the relevant section ofthe Companies Act 1985 which mak

59、es possession of such a document compulsory forpublic limited companies. Public companies cannot begin trading without having beenissued with a Section 117 certificate.Question 2Candidates must be able to show that they understand that, in terms of the Companies Act 1985,a new company must be regist

60、ered with the Registrar of Companies. Amongthe two mostimportant documents submitted to the Registrar will be the Memorandumof Association andthe Articles of Association which provides important information about the nature of thecompany and how it will be run. Until the new business has been regist