The Issues Of Companies Act Of 2006

Many believe that liability is a biggest issue in a general partnership than in a sole proprietorship. The owners of the company are still fully liable for any debts the company may accrue as well as the liability for any lawsuits that may be brought against the company. However, the bigger issue in a partnership is that now each partner can be liable for the other partner’s actions. If one partner is sued for malpractice, the other partner may suffer because of it.

This essay will explain the concepts of separate personality and limited liability and their significance in company law. The principle of separate personality is defined in the Companies Act 2006(CA) ; “subscribers to the memorandum, together with such other persons as may from time to time become members of the company are a body corporate by the name contained in memorandum.” This essentially means that a company is a separate legal personality to its members and therefore can itself be sued and enter into contracts. This theory was birthed into company law through the case of Salomon v Salomon and Co LTD 1872. This case involved a company entering liquidation and the unsecured creditors not being able to claim assets to compensate them. The issue in this case was whether Mr Salomon owed the money or the company did. In the end, the House of Lords held that the company was not an agent of Mr Salomon and so the debts were that of the company thus creating the “corporate Veil” .

Managers and shareholders are the utmost contributors of these conflicts, hence affecting the entire structural organization of a company, its managerial system and eventually to the company's societal responsibility. A corporation is well organized with stipulated division of responsibilities among the arms of the organizational structure, shareholders, directors, managers and corporate officers. However, conflicts between managers in most firms and shareholders have brought about agency problems. Shares and their trade have seen many companies rise to big investments. Shareholders keep the companies running

The thesis deals with the above concepts and discusses how the Companies Act 71 of 2008 (the Act) modified the law, particularly, by extending the legal capacity of a company and extinguishing or modifying the above rules which had previously restricted a company's ability

This paper describes the impact of the decision made in the case of Tesco Stores Ltd v Brent LBC on the law and its effects on the corporate world, and the comparison between the doctrine of vicarious liability that it outlines and the doctrine of identification that was used earlier to determine the liability of corporations in cooperate crime.

A shareholder in a limited company is not personally responsible for any of the debts of Tesco, other than for the value of his investment in Tesco. Although a shareholder's liability for Tesco's actions is limited, the shareholder may still be liable for its own acts. For example, the directors of small companies, who are frequently also shareholders, are often required to give personal guarantees of the company's debts to those lending to the company. They will then be liable for those debts in the event that the company cannot pay, although the other shareholders will not be so liable.

“Liabilities are debts: money you owe. Every business carries some liabilities—for example, ongoing payments to suppliers, rent for your office, compensation to employees, or fees for contractors” (Mancuso, 2014). Added liabilities may result if a business is ravaged by a fire or flood or if the business owner(s) become the victim of a lawsuit—for example, a patron, client or customer decides to sue your company after hurting themselves on company property. It is the intent of this paper to examine the role and responsibility of liability in different types of businesses from sole proprietorships to

o Weakness: there is a societal imbalance in the distribution of resources, and it is virtually impossible for courts/legislatures to make important decisions that do not make someone worse off

Salomon v A Salomon & Co Ltd [1897] is a widely quoted, breakthrough British corporate law case which gave way to the advancement of corporate law across the commonwealth. The House of Lords’ undisputed ruling firmly established or at least confirmed the principle of separate corporate personality, as specified in the Companies Act 1862. This meant that at the time of insolvency, the creditors of a company would not be able to sue the company’s shareholders to settle outstanding debts.

The concept of a company being a separate legal entity is the most striking illustration in separating the company from its owners. A paramount principle of corporate law is that no shareholder or member of a company is made liable for the obligations incurred by such incorporations A company is different from its members in the eyes of law. In continuations to this the opposite also holds true in the sense that neither can the company be held liable for the acts of its members. It is a fundamental distinction that a company is distinct from its members.

There is no clear framework of the rules that would cover the contingencies of a ruling to pierce the corporate veil Idoport Pty Ltd v National Australia Bank Ltd. The corporate Veil usually protects owners and shareholders from being held liable for corporate duties. Yet again a decision made by the court to lift that veil and would place the liability on shareholders, owners, administrators, executives and officers of the company without ownership interest. The purpose of this essay is to conduct an analysis on the concept of lifting the corporate veil and to review the different views on its fairness and equitability to present a better understanding of the notion, the methods used was throughout researching the numerous scholars views on the subject, case law and statutes examples, and the evidence provided by the empirical study of Ramsay & Noakes. When we discuss the lifting the corporate veil the first case that pops out is the case of Salomon V A. Salomon & Co Ltd, since the decisions of applying the corporate veil were first formed as a consequence of this case. The idea covers all of company law and distinguishes that a company is a separate legal entity from its members and directors. Furthermore, spencer (2012); have indicated that one of the core principles that followed the decision in Salomon v Salomon was the wide acceptance one man company’s. However In order to form a

4.1. In the transition period, the conflict in the concept of corporate governance from private enterprises

Other shareholders in a company likewise have limited liability, therefore no risk of personal loss so in the event of company failure, company law limits their personal liabilities so even though this benefits the shareholders the ordinary people see the result is an economy is run by shareholders of companies whose management have negligible direct personal accountability or loss if those companies should fail. Consequently, the ethics of that economy become questionable if the protagonists do not face the risk of unrestricted personal loss. The Salomon decision allowed, with full agreement to the companies act, sole traders and shareholders to have limited liability. The establishment of one-man companies under the Companies Act was solidified by this case. It now became of no relevance if shareholders are independent of one another, interdependent, dummy shareholders or nominees for the controlling shareholders; that is to say, the company was not an agent for its shareholders.

Barriers to Collaboration: A Review on the Impact of Companies Act 2006 [Type the document subtitle] [Pick the date] [Type the company name] pc   Table of Contents 1 Chapter 1: Introduction 4 1.1 Background to Study 4 1.2 Purpose of the Research 5 1.3 Research Aims and Objectives 6 1.4 Research Questions 6 1.5 Research Hypothesis 6 2 Chapter 2: Research Methodology 7 2.1 Introduction 7 2.2 Research Philosophy 7 2.3 Justification for choice of research philosophy– interpretivism 8 2.4 Research Approach 8 2.4.1 Deductive Approach – choice of research approach and justification 9 2.4.2 Mixed methods research 10 2.5 Research Design 10 2.6 Data Collection and Analysis 11 2.7 Sample size, method of data collection and justification 11 2.8 Ethical Issues 11 2.9 Validity and Reliability 12 2.10 Time Horizon 12 3 Chapter 3 - Literature Review 14 3.1 Introduction 14 3.2 The Company Act 2006 14 3.3 Shareholder Disputes 15 3.4 Informal Company Management 17 3.5 Barriers in Supply Chain Civil Industry 17 3.6 Collaborative Working and Conceptual Background 21 3.7 Managing Collaboratively 23 3.8 Main Contractor – Subcontractor Conflicts in Work Relationship 25 4 Chapter 4: Data Analysis and Interpretation 30 4.1 Quantitative Analysis 30 4.1.1 Shareholders’ Collaboration 30 4.1.2 Barriers to Shareholders’ Collaboration 32 4.1.3 Supply Chain collaboration 35 4.2 Comparison with Amendments made in Companies Act of India 48 4.3 Special Focus on Collaboration among Construction Companies 50

Corporation origin from the Latin word Corpus which means body. It is formed by a group of people and has separate rights and liability from those individual. In any means, corporation exists independently from its owner and this principle is called the doctrine of separate personality. Doctrine of separate personality is the basic and fundamental principle in a Company Law. This principle outline the legal relationship between company and its members. Company’s assets belong to the company not the shareholders as assets are the equity for creditors. Company must use up all its assets to pay off the creditors if it became insolvent. The same applies to the corporation’s debts. For limited liabilities company, the shareholder liability is limited which means that the shareholder is restricted to the number of shares they paid and not personally liable for the corporation’s debts. If the company does not have enough equity to pay off debts, the creditors cannot come after the shareholders. However, limited liability company can be very powerful when in hands who do fraud and on defeating creditors’ claims. Courts then can ignore the doctrine for exception cases and lifting the corporate veil. Lifting the corporate veil is a situation where courts put aside limited liability and hold a corporation’s shareholders or directors personally liable for the corporation’s debts.