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Corporate Law For Managers - Essay Example

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Corporate Law For Managers - Analyse the major problems surrounding pre-incorporation contracts and evaluate how far these problems have been resolved by the provision of section 36c of the Companies Act. 1985 as amended by the Companies Act. 2006.
The increase of business…
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Corporate Law For Managers
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Corporate Law For Managers

Download file to see previous pages... In the past, this type of contract was considered as rather risky – the completion of the incorporation procedure was not always guaranteed - a phenomenon also common in modern market. The introduction of the Companies Act 2006 led to the increase of the safety of the specific type of contract – in the section 51 of the above Law it is noted that the person who acted in behalf of the firm or as its agent is considered responsible for the performance of the specific contract; the successful incorporation of the company in the name of which this person acted is not of particular importance regarding the protection of the interests of the party that signed this agreement along with the company’s agent. In this paper the role of the section 51 of the Companies Act 2006 in relation to the problems of pre-incorporation contracts is critically examined; it is proved that the above provision had offered an important framework for the protection of the rights of interests of the parties (individuals or firms) that enter a pre-incorporation contract.
In order to identify the problems related with the pre-incorporation contracts it would be necessary to refer primarily to the concept of incorporation; in accordance with Cross et al. (2007, 13) ‘the incorporation process requires the development of articles of incorporation (sometimes called the corporate charter or certificate), which is publicly available and becomes something like the constitution that governs the corporation’; the founders of the corporation are free to choose the terms of the corporate charter – however, they are bound by the law as the application of specific rules, usually represented by the commercial ethics; moreover, it is required by the law that the corporate charter addresses specific issues; the rest of the content of the corporate ...Download file to see next pagesRead More
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