Business

DEFINITION: General Partnership

(1) Two or more persons (2) carry on a business in common (3) with intention to make profit.

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An LLP is formed by registering with Companies House. What must the registration include?

(1) The name of the LLP (which must end in LLP or Limited Liability Partnership)
(2) The location and address of registered office
(3) The names and addresses of the LLP's members and who will serve as designated members
(4) Details of people with signifi

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(Like a partnership) an LLP requires 2 or more members.
What happens if there is only one member?

AFTER 6 MONTHS, that member will be jointly and severally liable with the LLP for its debts incurred after the 6 months

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In an LLP, who is a Person with Significant Control (PSC)?

(1) Those holding over 25% of the surplus assets on winding up;
(2) Those holding over 25% of voting rights;
(3) Those holding the right to appoint/remove the majority of those entitled to take part in management
(4) Someone who can otherwise exercise sig

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To incorporate a company, the promoters must file what two things with Companies House?

(1) Memorandum of Association: signed agreement of persons wishing to become members
(2) Application for Registration: what this must include is in another cue card

NB. Articles NOT needed to be sent to CH to register a company if using model Arts (bespo

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When incorporating a company, a memorandum of association and an application for registration must be filed with CH. What is included in the application for registration?

(1) Proposed name of the Company
(2) Location of the registered office
(3) Details about the company's business
(4) Whether limited by shares or guarantee
(5) A statement of capital and initial shareholdings (total no. shares, their aggregate nominal valu

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If the shareholders make an alteration that no reasonable person would consider to be for the benefit of the company, what can be done?

A shareholder who did not vote in favour can challenge the alteration in court.
But the fact that an amendment adversely affects minority shareholders is not sufficient grounds to object if it is made in good faith in interests of company.

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Actual/Apparent Authority of Directors (rather than partners)

Actual authority: granted to that director by board resolution
Apparent: shouldn't arise often (as director usually has no power to bind unless acting as board), but may arise through past dealings.

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How does a company execute a document?

(1) Affixing its seal
(2) Signature of two directors, a director and a secretary, or a single director if witnessed

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How may a director call a meeting of the directors?

By giving reasonable notice of the meeting to the other directors. Must indicate proposed time, location and date and given to each director. Need not be in writing though.

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By what majority can shareholders remove a director?

Simple majority (but Arts may be modified to include Bushell v Faith clause which gives weighted voting to a director who is also a s/h).
Notice to adopt resolution to remove Dir must be given at least 28 days before the meeting and Dir must be given noti

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Derivative claims (where s/h who believes Dir is/will breach duty owed to company and appears that board will not assert company rights to prevent/remedy it)

Must show prima facie case for relief sought, and court must find it to be in the best interests of the company.
Damages belong to the company but company can indemnify s/h for expenses.

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What can a minority s/h do if they feel the company is being conducted in a manner unfairly prejudicial to that shareholder

They can petition court for a remedy. Usual remedy is force majority shareholders to buy minority's interest at a fair value.

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Get Revising

Business

Other cards in this set

Card 2

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Card 3

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Card 4

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Card 5

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