Company law
Companies Act 2006 -
What are the advantages of a company? - 1) Separate personality
2) separation of ownership and control
3) Transferable shares
4) Can select a type of company that best suits the needs of the members.
5) Flexible structure
Disadvantages - 1) Formalities of incorporation
2) There remains the need to hold meetings and pass resolutions.
3) Time and cost involved in complying with the rules of company law
4) Tax
Structure of the Companies Act - Part 1-7= The fundamentals of what a company is, how it can be
formed and what it can be called.
Part 8-12- The members (shareholders) and officers (management) of a company
Parts 13-14 - How companies make decisions
Parts 15-16 - The safeguards for ensuring that officers of a company are accountable to its members
Companies act continued - Parts 17-25 - raising share capital
Parts 29 -39 - The regulatory framework
Parts 40-42 - overseas companies operating in the UK, disqualifications of directors, business names and
statutory auditors.
Nature of the rules in the companies act 2006 - a) Mandatory Rules - prescriptive/compulsory rules
b) Permissive rules - allow the company to take certain actions. A public company may re-register as a
private company.
, c) Default rules - rules that apply where the company itself has created no rules of its own to deal with a
particular issue.
Company as a legal person - Corporate personality.
The company is a legal person distinct from its members even if one member owns all or almost all of
the shares.
Salomon v Salomon - This case lays down the general principles that a company has a separate legal
perosnality. Solomon sold his business to a company of which he was both majority shareholder and
managing director.
Companies - Unlimited - Put investment into company but if company fails can loose investment
money and creditors can come after you to meet the business debts.
Companies limited by Guarantee - Most are not for profit entities pursuing social, educational,
scientific, professional or charitable goals. There are private companies. Most CLGs do not have shares.
CLGs cannot form as share companies. There is no need for shares if there is no aim to share profits
easier to join and leave a CLG because of the absense of shares.
Formation - Similar procedures for public and private companies
- role of companies house and the registrar of companies.
- registered office - determines nationality - central base of company even though it may be carried out
all over. Enables companies to be created adn tehn monitors thereafter
- anyone can access the records of certain companies - crucial role
- one day service available
- mainly form filling, can be done automatically
Stages of forming a company - Has to be done through the registrar of companies - r
1. Registrar issues various forms
2. Can now begin trading as a company - now has become a separate legal person in law
3. Issue of a new document of a prospectus. - business plans etc
Companies Act 2006 -
What are the advantages of a company? - 1) Separate personality
2) separation of ownership and control
3) Transferable shares
4) Can select a type of company that best suits the needs of the members.
5) Flexible structure
Disadvantages - 1) Formalities of incorporation
2) There remains the need to hold meetings and pass resolutions.
3) Time and cost involved in complying with the rules of company law
4) Tax
Structure of the Companies Act - Part 1-7= The fundamentals of what a company is, how it can be
formed and what it can be called.
Part 8-12- The members (shareholders) and officers (management) of a company
Parts 13-14 - How companies make decisions
Parts 15-16 - The safeguards for ensuring that officers of a company are accountable to its members
Companies act continued - Parts 17-25 - raising share capital
Parts 29 -39 - The regulatory framework
Parts 40-42 - overseas companies operating in the UK, disqualifications of directors, business names and
statutory auditors.
Nature of the rules in the companies act 2006 - a) Mandatory Rules - prescriptive/compulsory rules
b) Permissive rules - allow the company to take certain actions. A public company may re-register as a
private company.
, c) Default rules - rules that apply where the company itself has created no rules of its own to deal with a
particular issue.
Company as a legal person - Corporate personality.
The company is a legal person distinct from its members even if one member owns all or almost all of
the shares.
Salomon v Salomon - This case lays down the general principles that a company has a separate legal
perosnality. Solomon sold his business to a company of which he was both majority shareholder and
managing director.
Companies - Unlimited - Put investment into company but if company fails can loose investment
money and creditors can come after you to meet the business debts.
Companies limited by Guarantee - Most are not for profit entities pursuing social, educational,
scientific, professional or charitable goals. There are private companies. Most CLGs do not have shares.
CLGs cannot form as share companies. There is no need for shares if there is no aim to share profits
easier to join and leave a CLG because of the absense of shares.
Formation - Similar procedures for public and private companies
- role of companies house and the registrar of companies.
- registered office - determines nationality - central base of company even though it may be carried out
all over. Enables companies to be created adn tehn monitors thereafter
- anyone can access the records of certain companies - crucial role
- one day service available
- mainly form filling, can be done automatically
Stages of forming a company - Has to be done through the registrar of companies - r
1. Registrar issues various forms
2. Can now begin trading as a company - now has become a separate legal person in law
3. Issue of a new document of a prospectus. - business plans etc
