In the third question, Flinstone Company possesses the right to object to Stone using the movie for his political intentions. Flinstone Company possesses the right to object to Stone’s proposal if the political ends compromise on The Doctrine Of Capital Maintenance Law Company Business Partnership Essay the prospects of the contract. In the fourth question, the contract becomes invalid in the absence of Mouse because it is part of DTI and; therefore, it has a right to be informed of any DTI activities and vote for contracts.
The advantage of this arrangement to the group is that it limits liability to each subsidiary company in the group whilst sharing the group profits for the benefit of the group structure. Such group structures can lead to the parent company forming subsidiary companies to run its risky part of the business and hence insulating itself from liability in the event of the subsidiary company failing to meet its obligations to the creditors. The directing mind of a corporation is the senior person whose authority is derived from the company’s board of directors to perform the functions of the company as directed and for the benefit of the company. Whilst the courts have at times pierced the veil to benefit creditors when a company is placed under liquidation, there has been reluctance by the same courts to pierce the veil in instances which could have favourable results for shareholders. However, common law has in some exceptional instances ignored this principle in stances of abuse or fraudulent use of a sham corporate structure. The courts have ignored the corporate sham structure and peer behind the veil to identify the “directing mind and will” that control the company and such intervention being termed as lifting the veil, cloak or mask.
Tortious Liability
This ex-post mechanism has been vital in ensuring that the shareholders do not misuse the limited liability privileges. The administrative cost of this particular mechanism is much less when compared to that of the minimum capital rule. This legislation, also known as the capital directive, was formulated with the aim of governing the limited liability companies; ensuring capital maintenance as well as the alteration of this capital.
Salomon became the major shareholder with his wife and children holding a share each but the company ran into financial problems leaving no assets for the unsecured creditors on liquidation. ‘Contractual capacity’ refers to a company’s legal ability to engage in an agreement with another party and be held liable to the terms of the contract. It is known that a company has a separate legal personality and is therefore capable of entering contracts with other parties for consideration. Article 15 of the directive limits the amount that can be paid to shareholders hence protecting the company’s paid-in capital. According to this article, the paid-in capital is usually counted as restricted capital and cannot be distributed among the shareholders. The restricted equity is however never separated from other company assets, and it might be lost if the company starts its operations or engages in loss-making activities.
The requirement of a minimum capital
The objects clause is available for members of the public to view, and it can be found within the company’s Memorandum of Association. In response to this, the CEO recommends that the company sells all its tractors and, simultaneously, hire independent tractor owners to help in hauling the company’s trailer. I would propose that the company makes the other company aware of the constraints that transporters face on road transport.
The amendments being suggested on the company capital rules have to ensure that they are in line with the goals of the member states of the United Kingdom. Comparison has been made between the United Kingdom’s and United States company https://accounting-services.net/normal-balance-of-accounts/ legislation particularly in regards to the minimum capital requirements. This is aimed at coming up with the best model in ensuring the protection of creditors and reducing the conflict between the creditors and shareholders.
