Limited liability

OVERVIEW OF CHINESE COMPANY LAW (I) Legal characteristics of Modern Company A modern company has a set of legal characteristics: 1. Independent legal personality 2. Limited liability 3. Transferability of shares / interests 4. Centralised Management 5. Investor Ownership These characteristics respond to the economic exigencies of the large modern business. 1. Independent Legal Personality Meaning: - Independent from investors and the management; - Counter-party in corporate

Lee’s Air Farm’s Limited, Lee formed a company with a share capital of three thousand pounds, of which 2999 pounds were held by Lee. He was also the sole governing director. In his capacity as the controlling shareholder, Lee exercised full and unrestricted control over the

seems like Jeb and Josh have a limited partnership pertaining their business. Jeb doesn’t actively participate on the day-to-day operations of the business, but he is a main financial contributor, therefore his liability with Arcadia Sports is limited and he cannot lose more than he has invested. For Josh however, being that he is the main operations manager he has unlimited personal liability, therefore, regardless of how much he has invested in the business his liability could potentially exceed that

over his whole business. DISADVANTAGE His capital is limited. When he suffers loss or incurs liability he will be held liable. Therefore company can purchase or sell assets, can open bank account, company is operates through Board of Directors.

1.1 Veil piercing is not the mess for its purpose of compromising benefits and costs of limited liability In this session, the paper presents the reasons lying behind the limited liability principle and then analyses its pros and cons, which eventually leads to a conclusion in favour of veil piercing. (i) Motives behind limited liability and its benefits Limited liability was introduced in the United Kingdom in the 15th century for certain institutions’ interest, such as monasteries and guilds which

available to the public, divided into the public company which is expensive to obtain and maintain, and the private company which is appreciated by most businesses to begin with. Also, there are limited and unlimited companies. In addition, a company can be classified as limited by guarantee or limited by capital shares which are in most companies’ favour. These are governed in the main by the Companies Act 1985 and relevant case law. Introduction There are several types of company. The

exactly made the greater impact on the age of industrialization. There were numerous contributing factors that propelled worldwide economic development. Britain, as the most advance economy of the time, showed leadership in its introduction of limited liability law which is arguably the primary force behind the movement towards industrial capitalism. With investors now able to freely enter business with one another while being shielded from substantial debt that could otherwise deter them from participating

Salomon v Salomon and Co Ltd (1897) When was law firstly introduced? Laws where present for decades as people where punished for breaking the laws. In regard to our case, which was in 1897. The case was between Salomon v Salomon and Co Ltd, which is a person and a company he owned. He filled a case against his company that the company owes him money and then the creditors of the company reverted the case on him as being the owner he should be liable to pay them back as the company went to liquidation

ch1 Student: ____________________________________________________________ ___________________________ Multiple Choice Questions 1. The person generally directly responsible for overseeing the tax management, cost accounting, financial accounting, and information system functions is the: A. B. C. D. E. treasurer. director. controller. chairman of the board. chief executive officer. 2. The person generally directly responsible for overseeing the cash and credit functions, financial planning, and

is inadequate for complex problems . Due to limited liability, company creditors’ interests are not protected . Creditors need to bear the risks inherent when dealing with limited company. Shareholders are discouraged from monitoring and controlling the business due to the benefits of limited liability. Furthermore, the principle of separate legal entity provides an ideal vehicle of fraud . “$2 Company” is an example. The company was formed as limited company that undercapitalised. Shareholders