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Sections and Laws Flashcards

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1
Q

S1200-1206 CA (2006)

A

If a sole trader uses a business name that is not his own surname (with or without initials) he must state his name and address on the various documents, such as business letters, invoices and orders.

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2
Q

S1 PA (1890)

A

Partnership - Relation which subsits between individuals working in common with a view to profit.

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3
Q

Khan v Miah (2000)

A

Business does not have to be in trading for a partnership to exist.

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4
Q

Sleeping partner case

A

M Young Legal Associates Ltd v Zahid (2006)

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5
Q

S4 PA (1890)

A

Business can be referred to as a firm

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6
Q

S4 PA (1890)

A

Group of people who’ve entered into a partnership
Name under which the business is conducted.

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7
Q

S5 PA (1890)

A

Partners are agents of the firm and agents to each other.

Agreement from any partner binds firm.

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8
Q

Tort of passing off

A

Do not name the company a similar name to an existing company.
CANNOT CAUSE PUBLIC CONFUSION

Business with original name can:
- Sue 2nd business for damages
- Obtain a court order to prevent the 2nd business name being used.

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9
Q

S28 PA (1890) - Duty of disclosure

A

Partners must ensure transparency and protect other partners interests.

Partners must provide true accounts assets and full info about any matters affecting the partnership.

Law v Law (1905)

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10
Q

S29 PA (1890) - Duty to account

A

Partners must account to the firm for any benefit obtained from any transaction concerning the partnership, WITHOUT CONSENT OF OTHER PARTNERS.

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11
Q

S30 PA (1890) - Duty to not compete

A

Partners cannot compete with partnership business, WITHOUT CONSENT OF OTHER PARTNERS.

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12
Q

S24 PA 1890

A

Sets out rights of partners; partners can make own arrangements

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13
Q

S24(1)

A

Equally share in the business’ capital/profits; equally contribute to losses.

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14
Q

S24(2)

A

Be indemnified (compensated) by the firm for any liabilities incurred or payments made during the firm’s business.

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15
Q

S24(3)

A

Entitled to 5% interest on capital contribution to the partnership beyond the initial agreed amount
(before ascertainment of profits S24(4)).

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16
Q

S24(4)

A

A partner is not entitled, before the ascertainment of profits, to interest on the capital subscribed by him.

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17
Q

S24(5)

A

Take part in the management of the business.

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18
Q

S24(6)

A

Partner is not entitled to a salary (often altered).

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19
Q

S24(7)

A

No person can be introduced to a partnership without the consent of all the existing partners.

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20
Q

S24(8)

A

No changes can be made to the nature of the partnership business unless all partners agree.

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21
Q

S24(9)

A

Firm’s books must be kept at the firm’s place of business.

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22
Q

S25 PA (1890)

A

Majority of partners cannot expel a partner unless power to do so has been conferred by express agreement.
MUST ACT IN GOOD FAITH

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23
Q

Blisset v Daniel (1853)

Kelly v Denman (1996)

A

Expelled unjustifiably.

Expelled justifiably.

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24
Q

S10 PA (1890)

A

Firm is liable for any loss or injury caused by a partner’s wrongful act or omission.

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25
S10 PA (1890) Case
Dubai Aluminium Co Ltd v Salaam (2003)
26
S17 PA 1890
A partner who retires from a firm is liable for partnership debts and obligations incurred before his retirement
27
S14 PA 1890
Holding out’ as a partner (leading others to believe you’re a partner of the firm if you’re not) either expressly or through their conduct represents themselves or allows themselves to be represented as a partner in a firm, then that person is liable IF 3RD party must have relied on that representation.
28
ss32-34 PA 1890
Automatic partnership dissolution: Expiry of a fixed term/particular purpose Giving notice Death or bankruptcy of any partner Continuation of the partnership becomes illegal Partner’s share becomes subject to a charge
29
Hudgell, Yeates and Co v Watson (1978)
Continuation of partnership became illegal
30
S35 PA 1890
Partner applies for partnership to be dissolved - Permanently incapacitated - Business can only be carried on at a loss - Breach of partnership agreement - Conduct prejudicially affects the business - Just and equitable to dissolve the partnership
31
S761 CA 2006
Registrar of Companies issues certificate of incorporation which companies CANNOT COMMENCE TRADING WITHOUT
32
S763 CA 2006
Allotted share capital must not be less than the statutory minimum (£50,000)
33
Saloman v Saloman & Co (1897)
Company has its own separate legal personality, distinct from its shareholders, directors and employees.
34
Macaura v Northern Assurance Co Ltd (1925)
Company must insure its own assets in its own name.
35
Sham company Gilford Motor Co v Horne Ltd (1933)
Veil of incorporation was lifted as Horne used Horne Ltd to evade contractual duties.
36
Petrodel Resources Ltd v Prest (2013)
Veil of incorporation was lifted from subsiduary company.
37
Statutory instances where veil of incorporation may be lifted:
S399 CA (2006) - accounts not prepared properly S767 CA (2006) - trading without trading certificate IA (1986) - wrongful fradulent trading Company Director Disqualification Act 1986 - disqualified director manages company
38
Daimler v Continental tyre & rubber co 1916
Daimler did not want to pay German s/h of Continental (UK). Veil lifted and determined German s/h as enemy and did not pay debt owed.
39
Groups of lifting veil
London Food Distributor v London Tower of Hamlets (1976) Adam v Cape Industries (1990)
40
S51 CA (2006)
Promotors are personally liable, unless contract states otherwise (or write draft contract and enter into after company is incorporated).
41
S9 CA (2006)
Registered documents: * Memorandum of association * Application for registration * Documents required by application * Appropriate fee
42
CA 2006, s 15(4)
Registrar of Companies issues the company’s CERTIFICATE OF INCORPORATION (birth certificate) – conclusive evidence that the company exists and has been registered under the Act.
43
S761 CA 2006
Plc must obtain an additional certificate from the Registrar which confirms that the company has the minimum allotted share capital (£50,000).
44
S69 CA 2006.
Company must not have same name as a company that is already on the register. TORT OF PASSING OFF: CANNOT CAUSE PUBLIC CONFUSION Business with original name can: - Sue 2nd business for damages - Obtain a court order to prevent the 2nd business name being used.
45
s53 CA 2006
Names must not constitute a criminal offence or be offensive. R v Registrar of companies, ex parte Attorney-General (1991)
46
S 54 CA 2006
Permission from Secretary of State for using words with connection to government
47
ss78-79 CA 2006
Change of company's name by special resolution (>75%) inform registrar
48
S69 CA 2006
Similar to an existing name Mislead the public by suggesting a connection between the company and the objector Company Names Adjudicator
49
Tort of passing off
Ewing v Buttercup Maragine Co Ltd (1917)
50
S19 CA 2006
Gives Secretary of State the power to prescribe model articles
51
S39 CA 2006
Company's actions cannot be challenged based on its constitution
52
S40 CA 2006
Director's powers to bind the company in any transaction with a person acting in good faith are deemed to be free of any limitations
53
S171 CA 2006
Directors have a duty to act in accordance with the company’s constitution
54
S41 CA 2006
Where the transaction is with an insider, the company can treat the contract as voidable
55
S33 CA 2006
Constitution of a company bind the company and its members
56
Rayfield v Hayes (2006)
Articles are enforceable by the company against its s/h. The directors (also s/h) were bound to obey the articles
57
S21 CA 2006
Articles can be amended by special resolution and MUST: - Comply with company legislation - Made in good faith - Made to benefit the company as a whole. Sidebottom v Kershaw Leese (1920)
58
Sidebottom v Kershaw Leese (1920)
Articles can be amended to benefit whole company.
59
S113 CA 2006
Every company must keep a register of its members detailing their names, addresses and the extent of their shareholding.
60
CA 2006, s 768
A certificate specifying any shares held by a member is evidence of the member’s ownership of those shares.
61
CA 2006, s 769
A share certificate must be issued within 2 months of the allotment of shares.
62
S776 CA 2006
Companies must issue certificates for transferred shares, debentures, or debenture stock within 2 months of the transfer.
63
If s/h knew/had reasonable grounds to believe that a dividend was unlawful
, the company can recover the dividend for its s/h.
64
If a dividend is unlawful because of negligently prepared accounts
company may be able to claim against the company’s auditors.
65
* The directors of public & private companies with >1 class of shares (shares that have different rights) cannot issue further shares without the express authority of their s/hs (CA 2006, s 549). * If a private company has only 1 type of share, the directors have authority to (can) issue further shares without s/h approval provided the articles do not expressly state otherwise (CA 2006, s 550).
66
shares must be paid for in money or money’s worth and must not be allotted at less than their nominal value (face value) (CA 2006, s 582).
67
* Any money raised by issuing shares at a premium is regarded as capital of the company and must be credited to a share premium account. * This account can only be used for certain purposes, such as writing off the expenses on the issue of the shares and issuing bonus shares to s/hs (CA 2006, s 610).
68
* A company may choose to make certain ordinary, or preference shares redeemable by the company at a future date (CA 2006, s 684).
69
CA06 ss260-264
* Statutory derivative claim – gives minority s/h protection by allowing them to bring a legal action.
70
– s994 CA06
Alternatively, a s/h may apply to a court for an order that the company’s affairs are being or have been carried out in a manner that is unfairly prejudicial
71
* Statutory derivative claim ss260-264 CA06
allows minority s/h to take legal action Stainer v Lee (2010)
72
* S994 CA06
s/h apply for court order if affairs are unfairly prejudicial. Personal comp ask company to refrain from continuing act complained of, or regulate company’s future conduct, or amend company’s articles petitioner’s shares to be purchased by the controlling s/h at fair value Rodcliffe (Simon) v Rodcliffe (Guy) and Home & Office Fire Extinguisher Ltd (2012)
73
* S122 IA 1986
company wound up on just and equitable grounds (last resort).
74
Foss v Harbottle (1843)
where a wrong is done to a company, it is the company itself that should take court proceedings to enforce its rights

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