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Company Law of the UK - Essay Example

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This essay explores the Company Law of the UK deals with the Corporations that formed under the Companies Act 2006. The corporations also governed under the Insolvency Act 1986, the UK Corporate Governance Code, European Union Directives and the Precedence of the competed court of law…
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Company Law of the UK
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Download file to see previous pages From the research it can be comprehended that the United Kingdom perhaps was the first country around the globe that simplifies the registration process for investors; limit their liability and the obligations in the event of insolvency. The discretionary powers allocated to the Board of Directors to sort out issues in line with the provisions of company constitution / company law. It would not be out of place to mention here that the UK has given a role model to other European Dynasties, Commonwealth Nations. The aims and objectives are to introduce such role model to woo the investors from all over the world to invest capital in a profitable business venture / thriving business avenues to make more and more money. The powers confer to the company may have their own parameters in terms of rights and obligations under the UK laws to comply. Corporate Company has the option to raise capital for their business in shape of equity finance, where the company has to off load its shares to general public through Stock Exchange. The company confers number of rights to share holders in terms of: a) voting b) dividends c) return of capital on redemption / liquidation d) Preferential rights for future shares. The corporate concerns keeps close repo with share holders in two ways: a) to inform share holders of the decision taken by the company through prospectus that contains complete details b) financial assistance to purchase its own shares. 5. The share holders may have the access to bank loan facilities against pledge of company’s shares on a fixed / floating rate of interest as the case may be, to be paid through monthly, quarterly, half yearly, yearly installments or balloon payments as decided by the approving authority. In the event of default banks / financial institutions may dispose off / auction the mortgaged assets of the company after inviting bids from the prospective bidders through esteemed print / electronic medias6. However, court provide protection to the company / or set aside unfair transaction in relation to disposing off the assets of the company by the banks / financial institutions towards appropriation of their outstanding liabilities. If a company fails to meet its loan obligations on due dates, the administrator comes to manage the affairs of the company as per UK insolvency law. If all out efforts of the administrator proved futile, the administrator starts the process of liquidation. The administrator disposes of the moveable / immoveable assets of the company to satisfy the claims of the creditors and then strike down the name of the debtor from its register7. Shares issued to the share holders can easily be transferred or disposed off as and when required. Holding the shares of a company means that a share holder being a member of the company can enforce the provision of the constitution of the company in both ways: a) against the company or other members of the company b) value of shares (nominal / at par) determines the share holders liability towards paying off debts of the company in case of insolvent liquidation8. The company usually offers their existing share holders a large number of shares from its common stock or preferred stock. This gives the rights to the share holders (other than bidder) to convert its acquired shares into a large number of common shares. This form of transaction is considered shareholders rights plan since it empowers the shareholders ...Download file to see next pagesRead More
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