Summary LPC 20201 - Business Law and Practice - Night Before Notes [High Distinction]

Business Law and Practice
“Night Before” Notes

Table of Contents
SGS 1 – Introduction...........................................................................................................4
SGS 2 – Company decision making.....................................................................................7
SGS 4 – Incorporating a Company.......................................................................................8
SGS 5 – Company Procedure.............................................................................................11
SGS 6 – The Company’s Constitution.................................................................................14
SGS 8 – Equity Finance......................................................................................................17
SGS 11 – Roles, Responsibilities, Requirements of Directors..............................................21
SGS 15 – Internal Disputes 1.............................................................................................31
S260(3) – only for act/omission involving.........................................................................36
negligence,.......................................................................................................................36
default,............................................................................................................................36
breach of duty or..............................................................................................................36
breach of trust by a director/other person of the company..............................................36
Claimant: includes member who was transferred shares *can be company (5c)...............36
STAGE 1: PERMISSION FROM COURT................................................................................36
Step 1a. The member must establish that he has a prima facie case before hearing may be
convened S261(1).............................................................................................................36
If not, court must dismiss the claim and can make any consequential order it considers
appropriate s261(2)..........................................................................................................36
Step 1b. Court must refuse if s263(2)................................................................................36
Hypothetical director ie acting in accordance with s172 would not seek to continue........36
Factors: prospects of success, damage to reputation if action fails, business disruption if
continued, cost of proceedings.........................................................................................36
Since the act has not occurred, the act was not authorised...............................................36
Since the act has occurred, the act was not authorised before it occurred or ratified since it
occurred (s239)................................................................................................................36
(4) court to have particular regard to views of independent members..............................37
- ie shareholders in GM which are not the directors/connected persons...........................37
- If an ‘indep organ’ of the company considered that an action brought on connected
person’s behalf would not be in the interests of the company, the action was properly
prevented.........................................................................................................................37


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