Law for Manager Essay

The union act 1890 governs the human sex actship of the persons and the exposeside world. And in respect of dissolution if at that place is no associateship pledge, the pardnership act inured out the rights and duties of the partners. Such rights and duties (by act or agreement) whitethorn be varies by the consent of both partners. (S 19). The relation which subsists surrounded by persons carrying on a telephone circuit in common with a mass to profit. chthonian S24 (5) in common means every partner has a say in the unfluctuating. The members argon that conceivable for their subscription unless the league agreement says otherwise.Saywell V Rope 1979 the wives be non in the confederation as no evidence suggested. Person includes a corporation as well as individuals. Companies terminate enter partnership. With a view to profit means certain organisations are excluded. E. g. club or society has no view to profit. Pitreavie Golf Club V Penman 1934 creditor car ry out beneath partnership, held, Clubs motivation was to ac manageledge member to play not parcel of land in profit. Business included every trade, occupation and profession. Keith Spicer Ltd V Mansell 1970 Claimant sue the partnership for debt owned, held, there were no partnership so claim failed.Because def carrying on blood line with no view to profit. It is important to determine whether a partnership exists. For tax reason. When acting in the course of business, the party get out bind the other partners to outsiders. S. 24 right to share in profit, management, duties and faith since the arrangement is uberrimae fidei. S. 35 dissolution. If not acting in good faith then the court force out dissolve the partnership. S. 28 duty to disclose, bond to render veritable account of solely things affecting the partnership to whatsoever partners or their legal representatives.Law V Law 1905 After the sales agreement there is a partnership asset that was not hidden from the ac count. But W had lost the right to avoid the contract as he takes the money while knowing disclosure had not made. Held the agreement to sell shares is avoidable. The contract may be verb ally, written or in deed. Basic A partnership is not a beau monde since it is not incorporated therefore it has no legal genius separate from its members. Partnership may be implied by conduct where a person holds himself out as being a partner.Then he will be apt(predicate) for the debt incurred S. 4 Under the Rules of the Supreme Court 1965, the partners may be sued in the firms name. In KHAN & OTHERS V MIAH & OTHERS 2000 HL confirmed that partnership begins at the tier of agreement, not the point when the affair starts. S. 5 each partner is an agent for the firm, has the power to bind the firm by his conduct. The partner is agent as far as hes acting on the firms ordinary activities.Mer keeptile Credit Co V Garrod 1962 G was sleeping partner and partnership agreement prohibited the sale o f cars which P did. Held G was bound by contract by virtue of S. making the contract was the doing of an act for carrying on in the usual way business lovable carried on by the firm. S 29 (1) every partner must account to the firm for all benefit made by him from any transaction concerning the partnership, it property, name or business connection. Bentley V craven 1853 C brought products at low price but sell them to the firm at wholesale rate. Held C cant retain the profit from these transaction and profit ask to hand to the firms. C had utilise partnership asset, his position to make profit. No person may be introducing as a partner without the consent of all partners.Consent is implied by the other partner when they sign the article. Any different concerning the lead of the business, it must be resolved by a majority vote of the partners. If a fundamental miscellany is proposed, requires consent of all partners. S. 9 every partner is liable jointly with the other partner for all debts and certificate of indebtedness of the firm. The civil liability flirt 1978 provided that judgement recovered against any person liable jointly with another, shall not be an action brought against the other. Business name. The firms name cant be used to fraudulently imply that the business is identical with another business.A persons business suffers in the same name/similar name may bring a passing saturnine action and obtain an enjoining stopping the defendant. ANNABELS (BERKELEY SQUARE) Ltd . VG. SCHOEK1972 S. 30 If any partner without the consent of the others, carries on business of the same nature as and competing with that of the firm, he must account for and pay over all profits made in that business. In the absence seizure of any agreement to the contrary, a partner can carrying a non-competing business which does not involve the use of the firms property. Croft V day 1843 Mr Day uses the same trade name as the other in the same street.Held the injunction was granted preventing the unfermented firm from employment under the name Day and Martin, the headingion of the new firm was to deceive the public. Under S. 34 it is a c riminal offence for a partnership to use the word limited or ltd in its name. Partnership agreement terms Name of partners Date on the start and end of the partnership How profit and termination being shared How much may each partner draw periodical At which bank the partner maintain its account Principal asset Submission of disputes to arbitration The partnership is based on agreement and they are free to alter them. S. 9 say the decision may be made unanimously a partnership cant be nervous strained for an penal purpose.Types of partnership 1) General partner takes active role in the daily management and has share in the loss and profit. 2) Sleeping partner contributes capital, take share in profit and liable for debt. But he does not take part in daily management. 3) A partner by holding out is not a tru e partner in the firm. Hes liable for financial obligation of the firm. MARTYN V GRAY 1863 Under S. 14 a person can become liable for debt if he by word or conduct represent or other to represent that hes a partner. E. g. his name on the firm letter. ) Salaried partner is an employee becomes holding out, he reliable salary and bonus depends on the profit. The 1890 Act does not deal with them. 4) LLP is a member under the LLP Act 2000. Change of partners. The death of the partner may dissolve the partnership, but the agreement should allow the partnership come virtually between the other partners. On the death of the partner, the estate is not liable for debts incurred after his death, even if the creditor was asleep of his death. S 17 (1) New partners are not liable for debts before they joint the partnership. The right to sue a new partner may be acquired by novation.Where an agreement between the creditor the new agreement and the old firm is made, and the original contract is therefore discharged, and the new firm is causeing the liability for the debt. Byrne V Reid 1902 the claimant can introduce his son as partner when they are 21, held, other partner could not hold out because this is layout in the partnership agreement. The retirement of a partner S. 17(2) He may be discharged from any existing liability by agreement (novation) between him, the firm and the creditors. Creditors are not force to accept novation and may still regard the retiring partner as liable for debt.The retiring partner can get compensation from the other partner. Under S. 36, the retiring partner will be liable for debt if 1)To person dealt before his retirement unless given written notice that hes no longer a partner or 2)To person who had no previous dealing with the firm before but know the composition before retirement. Unless the retirement person has given notice or had advertised in the capital of the United Kingdom Gazette. Such notice is effective without consent. Li ability for wrongs 1)S 10 provides that any wrongful act or oversight of any partner acting in the course of the business or with authority of co-partners.Any loss or injury is caused to person which is not a partner. The firm is liable to the same extent as the partner committing the wrong. This liability is jointly and several. 2) In HAMLYN V HOUSTON & Co 1905 a firm was liable to get across a claimant where one of the partners had bribed a clerk employed by the claimant in nightspot to obtain cultivation about a rivals business. 3) The firm will be vicariously liable for the torts move by its employees in the course of their employment. 4) Lloyd V Grace, Smith & Co 1912.Advantages of partnership Uphold of capital, being responsible, share expertise, share resources, share profit and flexibility. Disadvantages of partnership Conflict, jointly and severally liability, sharing debt/loss. Differences 1) A beau monde is a type of corporation, registered under caller legislation . high society act 2006. The members of the ships party may cede limited liability. The clubs debt belongs to the company not the shareholders, even if the company is insolvent. 2) A partnership is the relationship which subsists between persons carrying a business with a view to profit. S 1 Partnership act 1890.Its an unincorporated association, having no separate legal personality from the partners. It may have firms name but not corporate status. Partners are responsible for the acts of the firm. Partners have unlimited liability and responsible for partnerships debt. 3) LLP is registered at the companies kin and received a certificate of incorporation. LLP is corporate bodies having separate personality from their members. LLP is in person liable to the tierce party for wrongful acts and might be liable in the insolvency. They are tax as partnership, flexible, trading disclose, accounting and filing similar to the company.They can also lend and raise floating charge. Per petual age 1) A company has perpetual succession it is not affected by the death of the shareholders or multifariousness willpower of its shares. It continues to exist until it wound up by court/its members. 2) A partnership may be terminated on the death, retirement, bankruptcy or insanity of a partner. 3) LLP is incorporated, so not affected by the death etc. of a partner. His share may be inherited but the beneficiary will not be able to take part in management, only share in profit. A company has separate legal personality from its members.Salomon V Salomon & Co 1897, Lee V Lees air farm Ltd 1961, Macaura V Northern Insurance 1925, Cox V Coulsons 1916 An actor shoot an earreach in accident and claimant sue for damage in the partnership of the theatre (def) and theatrical company. Held def is not in partnership with the actors company so not liable, neither of them are agent. Corporate efface can be nameed where theres evidence of fraud/illegality. Gilford Motor Co V Horne 1933, Daimler Co Ltd V Continental Tyre Co 1916 (War time), Chandler V Cape Plc. Civil law-compensation Criminal law retribution/punishment. ascension corporate haze over to target parent company but difficult, usually subsidiary. Ownership Separate ownership and management in a company Small company has ownership and management in the pass of CEO in a partnership theres unity of ownership and command. All partners have right to management. Accounts Company accounts have to be laid before the general meeting, published and audited. They are control surface to public inspection Partnership accounts are not subject to public inspection and no need audited LLP account need auditors report and have be sent annually to companys house and to each member.Tax liability Corporation tax paid on companys profit, income tax by shareholders on dividend Income tax is paid by partners as self-employed LLP are tax as partnership. Shares. 1) Shares in listed companies re freely transferable. Pr ivate companies may impose restriction on transferring oh shares. Company can issue shares of different class with right attached to the shares. 2) A partners share is not freely transferable. New partner can be introduced with consent of all partners. In the absence of agreement, all partners have equal rights regarding the firms affairs and shares in capital, profit and losses.3) a member of LLP may leave by agreement or by given notice. (S. 43 of the 2000 act) The firm is not dissolve on the departure of the member so no shares in the LLPs assets. Unless agreement provides otherwise.Formalities 1) To form a company requires registration to be complied with payment of fees. During lifetime of the company there are administrative formalities to be complied. Certain information (change of article/special resolution) need to submit to registrar. Information about a companys affairs is readily available at companys house or companys registered office.This also applies to LLP. 2) The formation of partnership has no legal requirement to be complied. But the business names act 1985 applies the partnership being based on agreement between the partners. No requirement for partnership except those affecting the business. E. g. registration for VAT, return of profit from HMRC. The public has no right to access material concerning partnership affairs. 3) LLP required submitting an annual return and accounts to companies house and keeping accounts in accordance with company legislation and daily records disclosing the financial position of the firm.The obliterate of incorporation, it was established in Salomon that a registered company is a legal person separate from its members. This principle may be referred to as the veil of incorporation. In general the law will not go behind the separate personality of the company to its members. Restated by Lightman J in Acatos and Hutcheson Plc V Watson 1995. Principle of separate identity should be upheld unless there was a spe cific statutory provision or some other contractual term or common law principle to the contrary.Therefore, when the company is incorporated the veil of incorporation comes down, giving the company a separate legal personality from its members. Fraudulent trading, S. 213 of the insolvency act 19861) If it appears that any business of the company has been carried on with intent to defraud creditors of the company or of any other person, or for any fraudulent. 2) Purpose it may order that any persons who were knowingly parties to the carrying on of the business in the manner above mentioned are to be liable to make contributions to the companys assets as the court thinks proper. 3) S. 993 CA 2006 Criminal offences of fraudulent trading.3) High exemplar of proof. S213 of the IA 1986 provides that if in the winding up of a company it appears that the business has been carried on with the intent to defraud creditors or for any fraudulent purpose, the court, on the application of the liq uidator, may declare that any persons who were knowingly parties to the fraudulent trading shall make such contributions to the companys assets as the court thinks fit. ) S214 of the IA 1986 provides that where the liquidator of a company can show that D prior to liquidation, knew or ought to have known that there was no reasonable fortune that the company could avoid insolvent liquidation, and did not take steps to minimise the loss to creditors, the court may require D to make personal contribution to the companys assets. Does not have to be dishonest, unreasonable behaviour or negligence. Reproduce Marketing Consortium Ltd 1989 Company become insolvent Ds directors were not dishonest but failed to take action.Held the directors know that liquidation will occur, but fail to minimise loss during the disposal of assets. 5) S216 of the IA 1986 provides a criminal offence is committed. Directors or shadow directors during the 12 months prior to the companys insolvent liquidation who concerns himself during the next 5 yrs in the formation or management of the business with a name similar to the earlier company. S 217 imposes personal liability on such a person for the debts and liabilities of the second company. Ricketts V AD Valorem Factors 2003. ) Under S15 of the Company directors disqualification Act 1986, a person who has been modify continue acting in the management of a company will b e liable for the debts of the company contracted during that period. He can be guilty of a criminal offence under S13.Lifting the veil 1) Disqualified director. S. 15 of the company directors disqualification Act 1986, where disqualified from being a directors in dispute of disqualification. D liable for all debts of the company which were incurred when he was so acting. The same applies to the person who knowingly acts on the instructions of a disqualified person. ) S. 122(1) of the Insolvency Act 1986 petition to wind up a company on the grounds above. That it would be j ust and equitable to do so. For instance the court might look into why the company was organise. 3) Company name S349 companies act 1985. E. g. directors or secretary issues or signs on behalf of the company, a tone of exchange or order for goods under the companys name incorrectly stated they are liable if the company defaults. 4) Penrose V Martyr 1858-a companys secretary accepts a bill pinched on the companys name on which the name was incorrectly written.The company defaulted. Held The secretary was personally liable. 5) Trading certificate. Where no certificate has been obtained to enable a public company to commence trading, the directors commit a criminal offence and are personally liable to indemnify the other party for loss if the company defaults. However, failure to obtain the certificate does not affect the validity of any contract. Judgement. It is difficult to be very(prenominal) about the circumstances when a judge will be prepared to heaving the veil of incorpor ation.In Wolfson V Strathclyde Regional Council 1978 the COA laid down the principal that it is only permissible for a court to lift the veil where special circumstances exist indicating that the company is a mere facade concealing the true facts. Gilford Motor Company Ltd V Horne 1933, Jones V Lipman 1962, DHN Ltd V Strathclyde RC 1978, Adams V Cape Industries Plc and Another 1991. Judges lift veil to reveal fraud, sharp practice, oppression and illegality. Judge have lifted the veil in the 1) foreign enemies. During war time, where a company is control by enemy aliens contract will be unenforceable by the company.A company registered in the UK may be an alien enemy if those in control to its affairs are alien enemies. Daimler Co. Ltd V Continental tyre and Rubber Co Ltd 1916. 2) Where company is formed to enable persons to evade existing liability theres abuse of company law. Gilford Motor Co Ltd Horne 1933 an ex employee was personally bound by a valid restraint of trade from ap proaching his former firms customers. He set up new company to solicit customers of his previous employer.Held The Company was a mere sham to cloak the wrong doings of the director and the court grant the injunction against the new company as well as against him. ) Lord Denning as prepared to life the veil in Wallerstiner V Moir 1974 there was fraud surrounding the making of a loanword to director. The company of which he was a director made a loan to another company which was his puppet, so the loan should be treated as made to him. 4) Interest of justice. Creasey V Breachwood Motors Ltd 1993 an employee successfully claimed unfair dismissal against a company to whom all the assets of the original company, owned by the same individuals, had been transferred.However, the corporate veil can only be pierced if there is some evidence of impropriety or fraud. 5) Conflict viewpoint. In Creasey V Breachwood Motors Ltd 1994 the judge said the power of the court to lift the corporate veil exists. The authorities provide niggling guidance as to the circumstances in which this power is to be exercised. However, in Williams V Natural bread and butter Health Foods Ltd 1998 the HOL took the view that the corporate veil was sacrosanct and should only be lifted in the near exceptional circumstances. ) In Trustor AB V Smallbon 2001 the def, a managing director had transferred substantial sums to another company. The Chancery variability was prepared to pierce the veil and recognise the receipt by that company as that of the individual in control, because it was used as a device or facade to conceal the true fact. However, in the absence of impropriety or fraud the courts will not pierce the veil. 7) Corporate manslaughter. Gross negligence manslaughter- is the veil lifted here? Is the veil lifted in case where corporate manslaughter is established?