Summary
Summary Overview of Business Law and Practice (LPC)
- Module
- Business Law And Practice
- Institution
- University Of Law (ULaw)
An overview of all the subjects of business law and practice on the 2021/22 LPC programme.
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Outcome #Business structures 2
Recognise the existence of a partnership 6
Duration of a partnership, profit-sharing, decision-making, retirement, expulsion, 7
and dissolution
Key provisions in written partnership agreements 8
Former partner liability for debts 9
Separate legal personality 10
Limited liability 10
Groups of companies 11
Articles of association 12
Table A 13
Directors, powers and decision-making 13
Records of board meetings 17
Member decision-making 24
Calling general meetings 25
Written resolutions 28
Powers and rights of members 29
Company names 31
Income tax 32
Capital gains tax 35
Directors’ duties 36
Transactions with directors 38
Corporation tax 38
Ordinary and preference shares 40
Issuing new shares 41
Types of debt financing 42
Debt v equity finance 45
Common terms in security debentures 46
Registration of company charges 47
Company insolvency identification 48
Creditors petitioning for liquidation 48
Effects of liquidation 49
Directors’ duties on insolvency 50
Options on insolvency other than liquidation 50
Preservation of assets on insolvency 53
Dividends on liquidation 54
Transfer of shares and the register of members 54
Buy-back of shares procedure 56
Financing buy-back of shares 59
Removal of a director 59
Termination of directors’ service contracts 59
Stock transfer forms 62
Incorporation of a company 64
LPs and LLPs 66
1
,Business structures
Business structure Partnerships Limited Liability Private Limited
Partnerships Companies
Owners Two or more partners Two or more partners Owners are the
(Who and how [PA s1] [LLPA s2(1)(a)] shareholders. No
many?) required maximum or
minimum.
Managers Partners must share Members are free to Must be at least two
(Who and how responsibility for the decide on directors who run the
many?) business management and company on a day-to-
decision processes. day basis.
Designated members Mas can be amended
(at least 2) have the to allow for a sole
powers equivalent to director.
that of directors.
Decision-making Partners share Default rules 3 and 4 Decisions taken by
responsibility for provide that every directors on a day-to-
decision-making. member may take day basis through
Decisions made in the part in the board resolutions
ordinary course of the management of the passed with a simple
business on a simple LLP, and that no majority.
majority. member is entitled to
Decisions changing renumeration. Shareholders can vote
the nature of the Any management on some key issues,
business or the structure can be with either ordinary or
introduction of a new decided by a majority special resolutions.
partner require of the members.
unanimity. Decisions changing
the nature of the
business require
unanimity [default
rule 6].
Liability Partners are joint and Wrongful and Limited liability for
(Who and for how severally liable for fraudulent trading members only
much?) debts [PA s9 and CLCA provisions apply. insomuch as they have
s3] Ask whether the left outstanding on
Ask whether the contract was made in their nominal share
contract was made in the name of the firm price.
the name of the firm [LLPA s6]. Members only stand
[PA ss5-8]. - Actual authority? to lose their capital
- Actual authority? - Apparent contributions.
- Apparent authority? Directors can be held
authority? Members have limited personally liable for
Potential defendants: liability, and so all that breaches of duties or
- Partner who they stand to lose is personal guarantees.
signed the K the capital they
- Partnership with contributed unless the
all partners jointly LLP agreement
2
, liable [PA ss9&17] specifies a greater
- Any person who sum [IA s74]
was a partner at
the time the K was
entered into
- Someone who left
the firm before
the K, but: [PA
s17]
o Holding out
o Failure to
give notice of
retirement
o Novation
agreement
Ownership of With a partnership Assets are owned by The company owns
property and other asset, the beneficial the LLP – separate the property and
assets ownership rests with legal personality other assets. It is a
all the partners. separate legal entity
Need to show [Saloman v Saloman]
evidence of intention
of ownership.
Profit made from
partnership asset
must be shared.
Constitution Must be based on an None imposed, except The model articles are
(What is it? agreement. by the default rules automatically
Contract can be oral provided by imposed, but can be
or written or implied regulations [LLP Regs varied by special
by conduct. s7] if there is no LLP articles or bespoke
Must carry on a agreement. articles.
business in common. Memorandum.
The PA implies
statutory rules if there
is no agreement or
relevant matters are
not covered.
Accounts No published The designated Full accounts must be
(Production, audits, accounts. members must file produced for each
publication?) Each partner is annual accounts which financial year [CA
Publicity of responsible for their are then public s394].
information own accounts. documents [CA The accounts must
s444(6)]. Some can be give a true and fair
private by agreement. view of the state of
affairs of the company
[CA s396].
A directors’ report
must be published
along with them,
including a business
review [CA s415] –
3
, small companies are
exempt.
Must also be
circulated to
shareholders [CA
s432]
Accounts and
directors’ report must
be filed at CH [CA
s441].
Security A partnership can Can issue debentures Can grant mortgages
(What types can be grant security over its and grant fixed or and charges (fixed and
granted?) assets [Re Clough]. floating charges. floating) and
Must be registered. Every LLP must keep a unsecured loans.
There is an apparent copy of every charge
exception for floating requiring registration
charges. at its registered office
[CA s859P]. Must be
open for inspection by
any creditor or
member without fee.
Required to register
charges with CH.
Incorporation No incorporation Incorporation File an application for
formalities formalities [PA s1] document LLIN01 sent registration IN01 [CA
Must be two or more to CH including: [LLPA s9(1)], memorandum
people carrying on a s2(2)] of association and any
business in common - Name of the LLP special or bespoke
on the basis of an - Country of articles of association
agreement [Ilott v registered office with CH. Fee
Williams & Ors] - Registered office required.1
Name of partnership address
(if different to name - Name and address
of partners) falls of each member
under CA s1192-1206 - Identity of
designated
members
- Statement of
initial PSCs
Certificate of
registration issued.
Fee required.
Duties imposed on Utmost good faith [PA Same as general Duty to act within
managers by law ss28-30] partnership. powers [CA s171].
- Divulge all Owe a duty of good Duty to promote the
relevant faith to the body success of the
information corporate. company [CA s172].
connected with Unclear if owe duty to Duty to exercise
the business and each other. independent
their relationship Duty to account for judgment [CA s173].
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