Business Law Past Paper PDF

# Business Law Exam ## 3. Company Officers and Liabilities - CA 2006 - legal requirement of director (min 1 for 4d and 2 for pic) - $250 - a director is 'any person occupying the position of directors, by whatever name called. - $168 - shareholders can remove director through ordinary reso...

# Business Law Exam ## 3. Company Officers and Liabilities - CA 2006 - legal requirement of director (min 1 for 4d and 2 for pic) - $250 - a director is 'any person occupying the position of directors, by whatever name called. - $168 - shareholders can remove director through ordinary resolution at GM. Special notice needed (28 days). Director to be removed can attach written statement to proposal + attend meeting → Bushell v Faith - CDDA 1986 - courts have power to disqualify directors for up to 15 years - $167 - companies required to maintain register of directors + submit details at CH and directors are required to act in the company's best interest - $171-177- legal duties of directors, company articles can impose more - $140 - 3rd parties acting with good faith - Quorum = min number of attendees for board meeting, stated in articles (if not then 2) - 5 types of Directors (ENDAS) - Executive, Non-Executive, Defacto, Alternate and Shadow - Managing Director gets actual authority from board, if not then he has implied authority. - Other exec directors (sales, finance) have no implied authority but have authority which relates to their positions - Apparent (ostensible) Authority - no actual authority but company actions make it seem they do - Breach of duties - director must make up for losses suffered; company can claim any secret profits made, contract where interest not disclosed is voidable ## Business Organisations: - PA1890 - definition of Partnership → Khan & Miah (2000) - PA 1890-partners as agents of the firm - 28,29,30 PA1890 - Duties of Partners (Disclosure, To Account, Not Compele) - 24- Rights of Partners (1-9) - 25- Expulsion from Partnership Blissel v Daniel, Kelly v Denman - 14- Holding out as a partner Tower Cabinet Co Ltd v Ingram - 32-34 Dissolution of Partnership Hudgell, Yeates and Co Watson - companies as separate entities salomon v Salomon & Co, Macaura Northern Assurance - Lifting the veil Gilford Motor Co v Horne Ltd, Jones v Lipman, Petradel ### Key concepts/words - Actual and apparent (ostensible) Authority - Novation - Within the scope of Business → Binds firm - Vicarious Liability company liable for forts committed by employees/agents - Veil of Incorporation not pierced unless necessary (fraud, Sham, Statutory Exceptions) ## 2. Formation and Finance - CA2006 Promoters personal liability - $162 company name cannot be one already on registrar - $53 - name can't be offensive/criminal offence -> R v Registrar of Companies - Tort of passing off Ewing v Buttercup Margarine Co Ltd - $33-Binding power of constitution -> Rayfield & Hands, Sidebottom v Kershaw Leese ### Key concepts/words - Promoters - those who take procedural steps to set up a company - Pre-Incorporation contracts ($51) - Companies 'off the shelf' - Tort of passing off - Memorandum of Association States subscribers wish to form company - Articles of Association - states all rules necessary for conduct of company’s business - share capital and Loan (Debentures) Capital - 2 forms of security for loans - fixed and floating charges - must be registered at CH within 21 days otherwise unsecured ## 4. Company Meetings - $303 - s/h with 5% or more of voting Shares can require directors to hold GM - $306 - auditors can require GM to be held if they intend to resign - $336 - public company must hold AGM within 6 months of their fYE - $302 - director can hold EM at any time with correct notice - $306 - Court can call meeting if directors refuse due to relationship breakdown - $318 - meetings must have correct notice + quorum to be valid - $282 - Ordinary resolution, passed by > 50% s/h - 14 clear days notice required - $283 - Special resolution, passed by 7/75% s/h - 14 days notice + must state it’s special - $288 - Written resolution, for private companies cannot be used for removal/audit/director - Foss v Harbottle - where wrong is done to company, company itself should make claim - Stainer v Lee (2010) - $260-264 - Derivative claim (minority s/h brings claim in name of company) - $994 - Unfairly Prejudicial Conduct Rodliffe (Simon) v Rodliffe (Guy) - $122 of 14 1986 - petition to have company wound up ### Key concepts/words - General Meeting - all s/h invited - Annual General Meeting - all s/h invited - Class Meeting - only one type of s/h invited - clear days (don't count day notice is sent and day of meeting) - 2 types of voting - poll or hands (hands is default method) - court must refuse derivative claim if notional director wouldn’t authorize ## 5. Criminal Behaviour and the Winding Up of a Company - company itself, 200 or more s/h, s/h with 10% voting shares or Secretary of State can make the application for registration where serious corporate illegalities are suspected - $52 CJA 1993 - Insider dealing is a form of market abuse where individuals trade based on confidential information that could affect a company's stock price, gaining advantage - 3 defenses to insider dealing: didn't intend to make profit/avoid loss - Reasonable grounds to believe info already widely disclosed - would have done anyways - Penalties for insider dealing - unlimited fine, max 10 years prison - Insolvency - company unable to pay debts - 2 options: Administration and Liquidation - Compulsory liquidation -> petition made to court, must prove insolvency, court decides - Members voluntary liquidation - company must be solvent, director state solvency, within 5 weeks declaration SR passed at GM, liquidator appointed by s/h - Creditors voluntary liquidation - s/h pass SR, within 14 days meeting of creditors appoint liquidator - 3 ways to prove insolvency: - Fails to pay debt > £750 within 21 days - Statutory written demand - Total assets< Total liabilities - company assets not enough to pay debt - Order of debt: secured creditors (fixed charges), cost of winding up, preferential creditors, secured creditors (floating charges), unsecured creditors, s/h - $238 IA - Transactions at an undervalue (2 yrs before insolvency, liquidator can have reversed) - Preferences - favoring one creditor over another, liquidator can ask to reverse - Wrongful Trading - company insolvent, director continues trade - $214 IA - director made to contribute £io CDDA - disqualification up to 15 yrs - Fraudulent Trading - Dishonest actions beyond ordinary business - $992 CA 2006 - up to 10 yrs prison + fine regardless of insolvent or not - Administration - company protected from creditors during restructuring, proceeds from selling of company assets used to pay secured/preferential creditors - Administrator is appointed by court, company continues as going concern