《英美商法》双语国家级课程课件第05章 The formation and constitution of the company

Chapter5TheformationandconstitutionofthecompanyChapter5CompanylawFormationCapitalManagementInsolvencyCompanylawFormationCapitalManKeypointsofeachSessionFormationFormPromoterRegistration

PrivatecompanyPubliclimitedcompanyLimitedcompanypartnershipSeparatepersonalityPre-incorporationcontractMemorandumArticlesTableAKeypointsofeachSessionFormLearningObjectives:a)Explaintheroleanddutiesofcompanypromoters.b)Describetheprocedureforregisteringcompanies,bothpublicandprivate.c)Describethestatutorybooks,recordsandreturnsthatcompaniesmustkeepormake.LearningObjectives:a)ExplainUKCompanyhouseUKCompanyhouseTopiclist(1)Promotersandpre-incorporationcontract(2)Pre-incorporationexpensesandcontract(3)Registrationprocedures(4)Commencementofbusiness(5)Statutoryregisters(6)AccountsandreturnsTopiclist(1)Promotersandpr1.Promotersandpre-incorporationcontract(1)Definition:onewhoundertakestoformacompanyforaspecifiedpurposeandtakesthenecessarystepstocreateone.NB:Lawyersoracctswhosetupcompanyarenotpromoters1.Promotersandpre-incorpora(2)Dutiesofpromoters:toexercisereasonableskillandcare(a)Object:DutiesareowedtotheCompany.Dutiesaresimilartodutiesowedbydirectors.(b)Rolesofpromoters：AoftheP(company)

fiduciaryoftheP(company)(2)Dutiesofpromoters:toex(ⅱ)Fiduciaryduties(c)Contents:NowrongfulprofitDutyof

disclosure(ⅰ)GeneraldutyofskillandcareNoconflictofinterestwiththecompany(ⅱ)Fiduciary(c)Contents:Now(ⅱ)fiduciarydutiestothosepeoplewhoaretoownthecompany(ifdifferentfromthemselves)①Noconflictofinterestwiththecompany,itdoesnotmatterifthepromoterobtainssomeadvantagefromhispositionaspromoter.②disclosureofinterests:Apromotermaynotmakeasecretprofitwhileactinginthatcapacity.Ifhehasreceivedit,hemaybecompelledtoaccountforittothecompany.ErlangervNewSombreroPhosphateCo[1878]③nottomakeawrongfulprofit:GlucksteinvBarnes(ⅱ)fiduciarydutiesAppendix:★Aboutlegitimateprofitandwrongful/secretprofitLegitimateprofit:madebyapromoter

(whoacquiresinterestinpropertybeforepromotingacompanyandthenmakesaprofitwhenhesellsthepropertytothepromotedcompany)providedhedisclosesit.Wrongful/secretprofit:madebyapromoterwhoentersintoandmakesaprofitinacontractasapromoter.Heisinbreachoffiduciaryduties.NB:Wrongful/secretprofitmayberecovered;sometimescontractmayberescinded.Appendix:★AboutlegitimatepAppendix:信义义务(fiduciaryduty)这一述语源于英国衡平法，它是指当事人之间基于信义关系而产生的义务，信义关系从本质上看，它是指特定当事人之间的一种不对等(non-arm'slength)的法律关系，即受信人处于一种优势地位，而受益人(beneficiary)或委托人(theprinciple)则处于弱势地位，受信人作为权力拥有者(thepowerholder)具有以自己的行为改变他人法律地位的能力，而受益人或委托人则必须承受这种被改变的法律地位且无法对受信人实施直接控制。法律为了保护受益人或委托人的利益，防止受信人滥用其权力，以确保双方的信任关系，就要求受信人对受益人或委托人负有信义义务.Appendix:信义义务(fiduciaryduty)Erlangerv.NewSombreroPhosphateCo(1878)Fact:C,thepromoter,acquiredtheleaseofaphosphatemineintheWestIndiesfor£55,000.Thetransactionwasonhisownaccountbutinthenameofanother.Investmentwasnotprofitable.Hethenproceededtoselltheminingrightstothenewlyformedcompanyfor£110,000.Thepurchasewasapprovedbytheboardofdirectorsofthecompany,whohadbeenappointedbyCandwaseitherunderhisinfluence.Theprospectusthatofferedthecompany’ssharestothepublicdidnotdisclosethepromoter’sprofit.Whentheoriginalboardofdirectorswasreplaced,thenewdirectors,ondiscoveringtheswindle,suedCtohavethecontractforthesaleoftheminingrightsrescinded.Erlangerv.NewSombreroPhospHeld:thecontractshouldberescindedbecausetheprofitmadebyChadnotbeenproperlydisclosed(inthiscasetoanindependentboard)andthereforecouldnotbekeptbyhim.Held:thecontractshouldber(3)RemediesforbreachofPromoter’sfiduciaryduties(a)torescindthecontractandrecoveritsmoney.(b)recoverfromthewrongfulprofit(ifitistoolatetorescindorthecompanywanttokeepit)(c)toclaimfordamagesCommonlawremedies(3)RemediesforbreachofPrPersonwhosufferslossmayseekcompensation.Statutoryandlistingregulationstogetherwithrigorousinvestigationbymerchantbankshavegreatlylessenedtheproblemofthedishonestpromoters.

Recoveryforfalsestatementsindisclosuredocument.(Appliestopubliccompanies)Promotermustnotoffersecuritiesiftherearemisleadingstatementsinofferdocument.Promotermustdiscloseanypropertyacquiredbycompanyandanyofferofsecuritiestocompany.Recoverybyliquidatorasvoidabletransactions.Promotermustdiscloseanyfeesorbenefitsreceived.StatuteremediesPersonwhosufferslossmayse2.Pre-incorporationexpensesandcontracts(1)Pre-incorporationexpenses:Oncethecompanyformedmayagreereimbursingthepre-incorporationexpenses,butitdoesn’tmeanthatapromoterhasnoautomaticrighttobereimbursed.(2)Pre-incorporationcontracts(a)Definition:Acontractsignedonbehalfofacompanybeforethedateofincorporation.2.Pre-incorporationexpenses(b)Natureandliability(ⅰ)ContracttakeseffectbetweenthepersonwhosignedandtheTPs.(ⅱ)Itcannotberatifiedbythecompany.(Itisn’texisting)(ⅲ)Thecompanyisnotboundbypre-incorporationcontracts.(ⅳ)Thepromoterispersonallyliableonpre-incorporationcontracts.Evenifitwassigned'forandonbehalf'ofthecompany:PhonogramvLane.NB:Thepromoterisjointlyliableforthepre-incorporationexpenses.(b)Natureandliability(ⅰ)Co(c)Otherwaysofavoidingliabilityasapromoterforpre-incorporationcontracts(ⅰ)Thecontractremainsasadraft(sonotbinding)untilthecompanyisformed.(ⅱ)Ifthecontracthastobefinalisedbeforeincorporationitshouldcontainaclausethatthepersonalliabilityofpromotersistoceaseifthecompany,whenformed,entersanewcontractonidenticalterms.(ⅲ)tobuyacompany“offtheshelf”.Evenifapersoncontractsonbehalfofthenewcompanybeforeitisboughtthecompanyshouldbeabletoratifythecontractsinceitexisted‘ontheShelf’,atthetimethecontractwasmade.(c)Otherwaysofavoidinglia3.RegistrationProcedure(1)Acompanyisformedwhenitisissuedwithacertificateofincorporation.Thecertificateofincorporationstatesitsname,serialnumberandtheliabilityofitsmember.(2)Inordertoobtainacertificateofincorporation,thepromotersofacompanysendtheRegistrar(usuallyelectronically)3.RegistrationProcedure(1)A《英美商法》双语国家级课程课件第05章Theformationandconstitutionofthecompany（2）certificateofincorporation(a)Condition:IfeverythingisinordertheRegistrarwillissueaCertificateofIncorporation(andGazettesit).(b)Thecompany'slifedatesfromthedateontheCertificateofIncorporation(JubileeCottonMillsv.Lewis).

①Thesubscribersbecomemembers.②Aprivatecompanycannowtrade.③Apubliccompany,however,cannotstartbusinessuntilithasobtainedanadditionalcertificatefromtheregistrarunderS117.（2）certificateofincorporatio(c)Keypoint:Ifirregularitiesinformationprocedureoranerrorinthecertificateitselfarelaterdiscovered,thecertificateitselfnonethelessvalidandconclusive.(d)Function:conclusiveevidencetoproveAlltherequirementsoftheCompaniesActhavebeenfollowed.Thecompanyisacompanyauthorisedtoberegisteredandhasbeendulyregistered.Ifitstatesthatthecompanyisapubliccompanyitisconclusive.(c)Keypoint:Ifirregulariti4.Companies‘offtheshelf’(1)Definition:Thealternativewayofsettingupacompanyistobuyacompanywhichhasalreadybeenregistered.(2)Whenthecompanyispurchased,thesharesaretransferredtothebuyer,andtheregistrarisnotifiedofthedirector’sandthesecretary’sresignation.(3)Theprincipaladvantagesofpurchasinganofftheshelfcompanyareasfollows:4.Companies‘offtheshelf’(1《英美商法》双语国家级课程课件第05章TheformationandconstitutionofthecompanyPractice:Tom’scompany(18mins)Tomhascarriedonbusinessforanumberofyearsasasoletradersellingelectricalgoodstothepublic.Tomhasnowdecidedtoincorporatehisbusiness.Required(a)Explaintheadvantagesanddisadvantagesofpurchasingan'offtheshelf'companycomparedwithregisteringanewcompany.(7marks)(b)DescribetheextenttowhichTomneedstobringinanotherpersoninordertosatisfythelawrelatingtothemembershipandmanagementofaprivatecompanyLimitedbyshares.(3marks)(Total=10marks)Practice:Tom’scompany(18mAnswers:(a)Mostoftheadvantagesanddisadvantagesofpurchasinganofftheshelfcompanyrelatetotheformalitiesrequiredtoincorporateacompanyandtoaltervariousdetailsthatrelatetoexistingcompanies.(b)Advantages(ⅰ)TomwillnotneedtofiletherelatingdocumentswiththeRegistrarofcompany(memorandumandarticles,statutorydeclarationect).Thiswillbeaquickerandverypossiblycheaperwayofincorporatinghisbusiness.(ⅱ)Thiswillbenoriskofpotentialliabilityarisingfrompre-incorporationcontracts.Tomcancontinuetradingwithoutneedingtoworryaboutwaitingfortheregistrar’scertificateofincorporation.(ⅲ)Theneedtousetheservicesofprofessionalswillbedecreased,makingincorporationcheaper.Answers:(a)Mostoftheadva(c)DisadvantagesThedisadvantagesrelatetothechangethatwillberequiredtotheoff-the–shelfcompanytomakeitcompatiblewithTom’sneeds.Onbalanceitmaybeeasierandquickertopurchaseanoff-the–shelfcompany,butitdependsonhowmanychangeswillberequiredtomakethecompanycompatiblewithTom’sneeds.(c)Privatecompaniesmaybeformedwithonlyonemember.DirectorsandSecretaryAprivatecompanyneedonlyhaveonedirectorbutasoledirectorcannotbethecompanysecretary.ThereforeTomwillneedtobringinanotherpersonandappointhimorhertobecompanysecretary.(c)Disadvantages《英美商法》双语国家级课程课件第05章Theformationandconstitutionofthecompany（5）Re-registrationprocedures（5）Re-registrationprocedures《英美商法》双语国家级课程课件第05章Theformationandconstitutionofthecompany6.Statutorybooksandrecords(1)Why?(a)ThekeysourceofinformationonaUKcompanyisitsfileattheCompany’sRegistry.Companiesarealsorequiredbylawtokeepanumberofregisters,recordsandreturns.(b)Therequirementforpublicaccountability(Undercompanylawtheprivilegesoftradingthroughaseparatecorporatebodyarematchedbythedutytoprovideinformationwhichisavailabletothepublicaboutthecompany).6.Statutorybooksandrecords(2)What?Theynormallyinclude:Certificateofincorporations117publiccompanytradingcertificateEachyear’sannualaccountsandreturnCopiesofspecial,extraordinaryandsomeordinaryresolutionsAcopyofthealteredmemorandumorarticlesofassociationifrelevantNoticesofvariouseventssuchasachangeofdirectorsorsecretaryIfacompanyissuesaprospectus,asignedcopywithallannexeddocuments(2)What?Theynormallyinclu(a)Statutorybooks(a)Statutorybooks(b)Annualaccounts①Companiesmustkeepsufficientaccountingrecordstoexplainthecompany’transactionsandtheirfinancialpositions.②Foreachaccountingreferenceperiod(usually12months)ofthecompanythedirectorsmust:Prepareabalancesheetandprofitandlossaccountwhichgiveatrueandfairview.Laybeforethecompanyingeneralmeetingaccountsfortheperiod.DeliveracopyofthoseaccountstotheRegistrar(mostprivatecompaniesarepermittedtofileabbreviatedaccounts)(b)Annualaccounts①Companies(c)StatutoryreturnsEverycompanymustmakeanannualreturntotheRegistrarannuallygivingdetailsofdirector,secretariesandshares.whichismadeuptoa'returndate’(eithertheanniversaryofincorporationortheanniversaryofthedateofthepreviousreturn(ifthisdiffers)).Thereturnmustbedeliveredtotheregistrarwithin28daysofthereturndate.Thereturnmustbesignedbyadirectororasecretary,andaccompaniedbyafeeof￡30or￡15ifsentelectronically.(c)StatutoryreturnsEverycom《英美商法》双语国家级课程课件第05章Theformationandconstitutionofthecompany(d)AccountingrecordsThedirectorsarerequiredtokeepaccountingrecordswhichshowthefinancialpositionatanygiventime.Including:Dailyentriesofsumpaidandreceived.Arecordofassetsandliabilities.Statementofstockheldattheendofeachfinancialyear.…….(d)AccountingrecordsThedirePractice:Companyregistersandaccountingrecords(18mins)(a)Listandexplainthepurposeofthevariousregistersthathavetobekeptbyacompany.(b)Describetheaccountingrecordsthathavetobemaintainedbyacompany.Practice:Companyregistersan《英美商法》双语国家级课程课件第05章Theformationandconstitutionofthecompany《英美商法》双语国家级课程课件第05章TheformationandconstitutionofthecompanyAppendix:

Commencementofbusinessrules(1)publiccompany—(notincludingre-registration)(a)Apubliccompanymustobtainanadditionalcertificate(tradingcertificate)beforetheycancommencetrading(s.117).Appendix:Commencementofbusi(b)ApubliccompanymustprovidethreeextradetailstotheRegistrar:(i) sharecapital.(ii)preliminaryexpenses.(iii)amountdueorpaidtopromoters(iv)Thenominalvalueoftheallottedsharecapitalisnotlessthan￡50,000Theamountpaidupontheallottedsharecapital,whichmustbeatleastonequarterofthenominalvalueandtheentirepremiumifany；effectivelythisimposesaminimumofpaidupcapitalof￡12,500.IfeverythingisinordertheRegistrarwillissueatradingcertificateunders.117andpublishnoticeofitintheLondonGazette.(b)Apubliccompanymustprov(c) Ifapubliccompanystartstradingwithoutsatisfyings.117therearefourconsequences:(i)Thecompanyisprimarilyliable.(ii)Ifthecompanydoesnotmeetitsliabilitieswithin21daysofdemandbeingmade,thedirectorshavepersonalliability.(iii)Thecompanyanditsofficersareliabletoafine.(iv)Ifas.117certificateisnotobtainedwithinoneyearofincorporationitisgroundsforwinding‑upunders.122(1)(d)InsolvencyAct1986.(c) IfapubliccompanystartsNB:Whatistheoutcomeifapubliccompanydoesbusinessorborrowsbeforeobtainingacertificate?Theotherpartyisprotectedsincethetransactionisvalid.Howeverthecompanyandanyofficerindefaultispunishablebyafine.NB:Whatistheoutcomeifap(2)Privatecompany(2)PrivatecompanyChapter5TheformationandconstitutionofthecompanyChapter5CompanylawFormationCapitalManagementInsolvencyCompanylawFormationCapitalManKeypointsofeachSessionFormationFormPromoterRegistration

PrivatecompanyPubliclimitedcompanyLimitedcompanypartnershipSeparatepersonalityPre-incorporationcontractMemorandumArticlesTableAKeypointsofeachSessionFormLearningObjectives:a)Explaintheroleanddutiesofcompanypromoters.b)Describetheprocedureforregisteringcompanies,bothpublicandprivate.c)Describethestatutorybooks,recordsandreturnsthatcompaniesmustkeepormake.LearningObjectives:a)ExplainUKCompanyhouseUKCompanyhouseTopiclist(1)Promotersandpre-incorporationcontract(2)Pre-incorporationexpensesandcontract(3)Registrationprocedures(4)Commencementofbusiness(5)Statutoryregisters(6)AccountsandreturnsTopiclist(1)Promotersandpr1.Promotersandpre-incorporationcontract(1)Definition:onewhoundertakestoformacompanyforaspecifiedpurposeandtakesthenecessarystepstocreateone.NB:Lawyersoracctswhosetupcompanyarenotpromoters1.Promotersandpre-incorpora(2)Dutiesofpromoters:toexercisereasonableskillandcare(a)Object:DutiesareowedtotheCompany.Dutiesaresimilartodutiesowedbydirectors.(b)Rolesofpromoters：AoftheP(company)

fiduciaryoftheP(company)(2)Dutiesofpromoters:toex(ⅱ)Fiduciaryduties(c)Contents:NowrongfulprofitDutyof

disclosure(ⅰ)GeneraldutyofskillandcareNoconflictofinterestwiththecompany(ⅱ)Fiduciary(c)Contents:Now(ⅱ)fiduciarydutiestothosepeoplewhoaretoownthecompany(ifdifferentfromthemselves)①Noconflictofinterestwiththecompany,itdoesnotmatterifthepromoterobtainssomeadvantagefromhispositionaspromoter.②disclosureofinterests:Apromotermaynotmakeasecretprofitwhileactinginthatcapacity.Ifhehasreceivedit,hemaybecompelledtoaccountforittothecompany.ErlangervNewSombreroPhosphateCo[1878]③nottomakeawrongfulprofit:GlucksteinvBarnes(ⅱ)fiduciarydutiesAppendix:★Aboutlegitimateprofitandwrongful/secretprofitLegitimateprofit:madebyapromoter

(whoacquiresinterestinpropertybeforepromotingacompanyandthenmakesaprofitwhenhesellsthepropertytothepromotedcompany)providedhedisclosesit.Wrongful/secretprofit:madebyapromoterwhoentersintoandmakesaprofitinacontractasapromoter.Heisinbreachoffiduciaryduties.NB:Wrongful/secretprofitmayberecovered;sometimescontractmayberescinded.Appendix:★AboutlegitimatepAppendix:信义义务(fiduciaryduty)这一述语源于英国衡平法，它是指当事人之间基于信义关系而产生的义务，信义关系从本质上看，它是指特定当事人之间的一种不对等(non-arm'slength)的法律关系，即受信人处于一种优势地位，而受益人(beneficiary)或委托人(theprinciple)则处于弱势地位，受信人作为权力拥有者(thepowerholder)具有以自己的行为改变他人法律地位的能力，而受益人或委托人则必须承受这种被改变的法律地位且无法对受信人实施直接控制。法律为了保护受益人或委托人的利益，防止受信人滥用其权力，以确保双方的信任关系，就要求受信人对受益人或委托人负有信义义务.Appendix:信义义务(fiduciaryduty)Erlangerv.NewSombreroPhosphateCo(1878)Fact:C,thepromoter,acquiredtheleaseofaphosphatemineintheWestIndiesfor£55,000.Thetransactionwasonhisownaccountbutinthenameofanother.Investmentwasnotprofitable.Hethenproceededtoselltheminingrightstothenewlyformedcompanyfor£110,000.Thepurchasewasapprovedbytheboardofdirectorsofthecompany,whohadbeenappointedbyCandwaseitherunderhisinfluence.Theprospectusthatofferedthecompany’ssharestothepublicdidnotdisclosethepromoter’sprofit.Whentheoriginalboardofdirectorswasreplaced,thenewdirectors,ondiscoveringtheswindle,suedCtohavethecontractforthesaleoftheminingrightsrescinded.Erlangerv.NewSombreroPhospHeld:thecontractshouldberescindedbecausetheprofitmadebyChadnotbeenproperlydisclosed(inthiscasetoanindependentboard)andthereforecouldnotbekeptbyhim.Held:thecontractshouldber(3)RemediesforbreachofPromoter’sfiduciaryduties(a)torescindthecontractandrecoveritsmoney.(b)recoverfromthewrongfulprofit(ifitistoolatetorescindorthecompanywanttokeepit)(c)toclaimfordamagesCommonlawremedies(3)RemediesforbreachofPrPersonwhosufferslossmayseekcompensation.Statutoryandlistingregulationstogetherwithrigorousinvestigationbymerchantbankshavegreatlylessenedtheproblemofthedishonestpromoters.

Recoveryforfalsestatementsindisclosuredocument.(Appliestopubliccompanies)Promotermustnotoffersecuritiesiftherearemisleadingstatementsinofferdocument.Promotermustdiscloseanypropertyacquiredbycompanyandanyofferofsecuritiestocompany.Recoverybyliquidatorasvoidabletransactions.Promotermustdiscloseanyfeesorbenefitsreceived.StatuteremediesPersonwhosufferslossmayse2.Pre-incorporationexpensesandcontracts(1)Pre-incorporationexpenses:Oncethecompanyformedmayagreereimbursingthepre-incorporationexpenses,butitdoesn’tmeanthatapromoterhasnoautomaticrighttobereimbursed.(2)Pre-incorporationcontracts(a)Definition:Acontractsignedonbehalfofacompanybeforethedateofincorporation.2.Pre-incorporationexpenses(b)Natureandliability(ⅰ)ContracttakeseffectbetweenthepersonwhosignedandtheTPs.(ⅱ)Itcannotberatifiedbythecompany.(Itisn’texisting)(ⅲ)Thecompanyisnotboundbypre-incorporationcontracts.(ⅳ)Thepromoterispersonallyliableonpre-incorporationcontracts.Evenifitwassigned'forandonbehalf'ofthecompany:PhonogramvLane.NB:Thepromoterisjointlyliableforthepre-incorporationexpenses.(b)Natureandliability(ⅰ)Co(c)Otherwaysofavoidingliabilityasapromoterforpre-incorporationcontracts(ⅰ)Thecontractremainsasadraft(sonotbinding)untilthecompanyisformed.(ⅱ)Ifthecontracthastobefinalisedbeforeincorporationitshouldcontainaclausethatthepersonalliabilityofpromotersistoceaseifthecompany,whenformed,entersanewcontractonidenticalterms.(ⅲ)tobuyacompany“offtheshelf”.Evenifapersoncontractsonbehalfofthenewcompanybeforeitisboughtthecompanyshouldbeabletoratifythecontractsinceitexisted‘ontheShelf’,atthetimethecontractwasmade.(c)Otherwaysofavoidinglia3.RegistrationProcedure(1)Acompanyisformedwhenitisissuedwithacertificateofincorporation.Thecertificateofincorporationstatesitsname,serialnumberandtheliabilityofitsmember.(2)Inordertoobtainacertificateofincorporation,thepromotersofacompanysendtheRegistrar(usuallyelectronically)3.RegistrationProcedure(1)A《英美商法》双语国家级课程课件第05章Theformationandconstitutionofthecompany（2）certificateofincorporation(a)Condition:IfeverythingisinordertheRegistrarwillissueaCertificateofIncorporation(andGazettesit).(b)Thecompany'slifedatesfromthedateontheCertificateofIncorporation(JubileeCottonMillsv.Lewis).

①Thesubscribersbecomemembers.②Aprivatecompanycannowtrade.③Apubliccompany,however,cannotstartbusinessuntilithasobtainedanadditionalcertificatefromtheregistrarunderS117.（2）certificateofincorporatio(c)Keypoint:Ifirregularitiesinformationprocedureoranerrorinthecertificateitselfarelaterdiscovered,thecertificateitselfnonethelessvalidandconclusive.(d)Function:conclusiveevidencetoproveAlltherequirementsoftheCompaniesActhavebeenfollowed.Thecompanyisacompanyauthorisedtoberegisteredandhasbeendulyregistered.Ifitstatesthatthecompanyisapubliccompanyitisconclusive.(c)Keypoint:Ifirregulariti4.Companies‘offtheshelf’(1)Definition:Thealternativewayofsettingupacompanyistobuyacompanywhichhasalreadybeenregistered.(2)Whenthecompanyispurchased,thesharesaretransferredtothebuyer,andtheregistrarisnotifiedofthedirector’sandthesecretary’sresignation.(3)Theprincipaladvantagesofpurchasinganofftheshelfcompanyareasfollows:4.Companies‘offtheshelf’(1《英美商法》双语国家级课程课件第05章TheformationandconstitutionofthecompanyPractice:Tom’scompany(18mins)Tomhascarriedonbusinessforanumberofyearsasasoletradersellingelectricalgoodstothepublic.Tomhasnowdecidedtoincorporatehisbusiness.Required(a)Explaintheadvantagesanddisadvantagesofpurchasingan'offtheshelf'companycomparedwithregisteringanewcompany.(7marks)(b)DescribetheextenttowhichTomneedstobringinanotherpersoninordertosatisfythelawrelatingtothemembershipandmanagementofaprivatecompanyLimitedbyshares.(3marks)(Total=10marks)Practice:Tom’scompany(18mAnswers:(a)Mostoftheadvantagesanddisadvantagesofpurchasinganofftheshelfcompanyrelatetotheformalitiesrequiredtoincorporateacompanyandtoaltervariousdetailsthatrelatetoexistingcompanies.(b)Advantages(ⅰ)TomwillnotneedtofiletherelatingdocumentswiththeRegistrarofcompany(memorandumandarticles,statutorydeclarationect).Thiswillbeaquickerandverypossiblycheaperwayofincorporatinghisbusiness.(ⅱ)Thiswillbenoriskofpotentialliabilityarisingfrompre-incorporationcontracts.Tomcancontinuetradingwithoutneedingtoworryaboutwaitingfortheregistrar’scertificateofincorporation.(ⅲ)Theneedtousetheservicesofprofessionalswillbedecreased,makingincorporationcheaper.Answers:(a)Mostoftheadva(c)DisadvantagesThedisadvantagesrelatetothechangethatwillberequiredtotheoff-the–shelfcompanytomakeitcompatiblewithTom’sneeds.Onbalanceitmaybeeasierandquickertopurchaseanoff-the–shelfcompany,butitdependsonhowmanychangeswillberequiredtomakethecompanycompatiblewithTom’sneeds.(c)Privatecompaniesmaybeformedwithonlyonemember.DirectorsandSecretaryAprivatecompanyneedonlyhaveonedirectorbutasoledirectorcannotbethecompanysecretary.ThereforeTomwillneedtobringinanotherpersonandappointhimorhertobecompanysecretary.(c)Disadvantages《英美商法》双语国家级课程课件第05章Theformationandconstitutionofthecompany（5）Re-registrationprocedures（5）Re-registrationprocedures《英美商法》双语国家级课程课件第05章Theformationandconstitutionofthecompany6.Statutorybooksandrecords(1)Why?(a)ThekeysourceofinformationonaUKcompanyisitsfileattheCompany’sRegistry.Companiesarealsorequiredbylawtokeepanumberofregisters,recordsandreturns.(b)Therequirementforpublicaccountability(Undercompanylawtheprivilegesoftradingthroughaseparatecorporatebodyarematchedbythedutytoprovideinformationwhichisavailabletothepublicaboutthecompany).6.Statutorybooksandrecords(2)What?Theynormallyinclude:Certificateofincorporations117publiccompanytradingcertificateEachyear’sannualaccountsandreturnCopiesofspecial,extraordinaryandsomeordinaryresolutionsAcopyofthealteredmemorandumorarticlesofassociationifrelevantNoticesofvariouseventssuchasachangeofdirectorsorsecretaryIfacompanyissuesaprospectus,asignedcopywithallannexeddocuments(2)What?Theynormallyinclu(a)Statutorybooks(a)Statutorybooks(b)Annualaccounts①Companiesmustkeepsufficientaccountingrecordstoexplainthecompany’transactionsandtheirfinancialpositions.②Foreachaccountingreferenceperiod(usually12months)ofthecompanythedirectorsmust:Prepareabalancesheetandprofitandlossaccountwhichgiveatrueandfairview.Laybeforethecompanyingeneralmeetingaccountsfortheperiod.DeliveracopyofthoseaccountstotheRegistrar(mostprivatecompaniesarepermittedtofileabbreviatedaccounts)(b)Annua