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This will be accomplished by setting out the main features of the limited liability company and the partnership. Once these features are set out, comparisons relative to the advantages of a registered limited liability company over a partnership can be explained and evaluated.
The main legal benefits of a registered limited liability company is the existence of perpetual life, its separate legal personality from its incorporators and the limited liability of shareholders and other classes of owners and investors.2 Under UK company law, a company has limited liability status when the shareholders’ liability is limited to the amount that is “payable for the shares”.3 A registered company simply refers to the fact that the company is registered with the companies’ registrar and is a typical function of UK company law formalities.4
The concept of limited liability was first introduced in UK law under the Limited Liability Act 1855 conferring upon shareholders what was characterized as “conditional limited liability”.5 Liability was conditional upon providing “a minimal capital” which necessitated adding the word limited to the company’s name signaling the fact of liability.6 In 1856 the UK introduced the Joint Stock Companies Act which officially made limited liability unconditional. The Companies Act 1862 reflected the concept of limited liability and the era of limited liability was deeply entrenched in the UK’s corporate culture.7
Essentially, what limited liability means is that the shareholders of the company many not be held liable for the company’s debts “beyond the amount that he has chosen to invest”.8 In other words, if the company is unable to discharge its debts the shareholders cannot be personally liable for the shortfall.
A limited liability company also enjoys the status of legal personality which
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The study helps to analyze the legal matters associated with the companies act and to distinguish between situations under which a person serving for the organization are held guilty and in situations where he is simply let off. It can concluded that the court of Law is very much strict with matters of fraud and punishes the convict and provides him with no opportunity to hide behind the reasons of serving his obligation for the company.
This paper seeks to perform an IRAC analysis of fraudulent phoenix activity, whereby the issue, rule, analysis, and conclusion will be made. Issue Australian corporate law has always sought to reinforce commercial and entrepreneurial risk taking, since these are essential to the creation of wealth, as well as the continuous functioning of the market (Adams, 2012).
Note however, that the arbitration system and enforcement capacities also have a role to play as far as business law is concerned. Under this sphere are the commercial courts and the specialized economic courts. They come in when transactions between parties are not honored.
The law outlines that directors cannot receive any benefit from their position, unless they obtain an express legal authority from the board to do so. The Companies Act outlines that a director of a company must to circumvent situations in which the director possess, or can manifest an express or indirect interest that diverges of may clash with the interests of the company.
It has been enforced with the intention to govern the operations of the corporate houses of the country and instructs them to operate with the best interest of all the stakeholders involved with them1. As per the Company Law, it is commonly admitted that company is a separate legal entity which advocates that the members of the company are distinct from the corporate body.
It is particularly owing to the fact that the extension of the case led to the foundation of the Salomon principles in relation to Company Law related statutes. The principle, in simple terms, implies that the company has been legally incorporated and accordingly it should be considered as an independent person with certain specific rights along with liabilities to guide its operations.
Under its equitable discretion the court may disregard the apparent form of limited liability personae, and focus on the actual substance. Hence there are decisions which have distinguished the apparent form of a limited company to show it for
This is sometimes referred to in the literature as 'lifting the veil of incorporation'.
When legal provisions that govern the interaction of employers and employees are violated, or when either party fails to meet their legal obligations, lawsuits are highly likely to occur. In the Chandler v Cape plc  EWCA 525 case, a health and safety issue resulted in a
In other words, this verdict has provided a veil between an owner and a company and through this veil the owner would not be personally blamed or persecuted if corporate actions have been taken on behalf of the company; Thereby, the company would itself be
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