13 Jun DEMONSTRATE A THOROUGH KNOWLEDGE AND UNDERSTANDING OF SELECTED ASPECTS OF THE LAW RELATING TO BUSINESS ASSOCIATIONS
The essence of the company is that it is a separate person in law. The partnership does not have legal personality. The partners are agents of the partnership. From this very basic difference between the company and the partnership flow many of the advantages
The essence of the company is that it is a separate person in law….The partnership does not have legal personality. The partners are agents of the partnership….From this very basic difference between the company and the partnership flow many of the advantages and disadvantages of incorporation.’ (from Bourne on company law, chapter 1).
Critically analyse this statement.
1. Demonstrate a thorough knowledge and understanding of selected aspects of the law relating to Business Associations
2. Demonstrate an awareness of the main implications for business and investors of the law relating to business associations
3. Apply relevant law to moderately complex factual situations so as to identify the core and some subsidiary issues involved and suggest a range of appropriate, reasoned solutions
4. Critically evaluate, with limited guidance, selected aspects of the operation of the Law of Business Associations in contemporary society
The introduction should state the topics that are going to be discuss in the essay (which Stems form the basic distinction between separate legal personality and going with the limited liability status
INTRODUCTION: in the assignment look at the major distinction between partnership and company’s, SLP I then am going to consider that how Separate legal person is the main element in the advantages and disadvantages.
Conclude by looking at the new hybrid the limited liability partnership. SLP established by salamon and salamon.
Advantages and disadvantages all stem from SEPARATE LEGAL PERSPONALITY
Formation of a company
System of registration
Formation of partnership which is just a collection of individuals
Can have a partnership by will of conduct section 1 partnership 1890 relationship between persons
Partnership does not have to go through formation costs, you can have a partnership at will. Because of the lack of Separate legal personality
Limited liability, Separation of shareholders from directors – no liability for company debts because of separate legal personality because a company is a Separate legal personality . Is that always the case do you always have the advantage of limited liability status NO
Wrongful trading , making directors personally liable for company’s debts
Can have limited liability because of Separate legal personality is not always
Joint and severable liability disadvantage no protection for partners personal account , partnerships are not good in business failure terms
Section 10 tort liability partners are liable (sexual harassment) even when the crime was not committed by fellow partners in a company only the person who committed the crime will be liable – Limited Liability status
Rasing Capita l
Company’s are brilliant at raising capital because of the ability to transfer shares.
Keeping separate legal personality in the case of a company, requires cost
Partnership can raising capital by bringing in a dormant partner
Dormant partners do not have say in running the company, disadvantage because if controllers of the company are not running the company properly he the dormant partner has no choice but to accept how the company is run even if I decisions the directors are making are detrimental to the company
Separation from ownership and control using shares. Advantage of floating shares
In a company the shareholders can give advice without loosing their limited liability status. Not the same or a partnership
All the advantages and disadvantages do Stem from the presence of SLP
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