I Company Law

The following text introduces the area of company law. Complete the text by using the words in the box below.

agreements borrow corporations court debts dividends employees legal legislation liability limited objectives partnership profits property registered (x2) shareholders sole trader sue

A company is a 1) legal entity, allowed by 2)__________, which permits a group of people, as 3)__________, to create an organization, which can then focus on pursuing set 4)__________. It is empowered with legal rights which are usually only reserved for individuals, such as the right to 5)__________ and be sued, own 6)__________, hire 7)__________ or loan and 8)__________ money. The primary advantage of a company structure is that it provides the shareholders with a right to participate in the 9)__________, a proportionate distribution of profits made in the form of a money payment to shareholders, without any personal 10)__________.

There are various forms of legal business entities ranging from the 11)_________, who alone bears the risk and responsibility of running a business, taking the profits, but as such not forming any association in law and thus not regulated by special rules of law, to the 12)__________ company with 13)__________ liability and to multinational 14)__________. In a 15)__________, members “associate”, forming collectively an association in which they all participate in management and sharing 16)__________, bearing the liability for the firm’s 17)__________ and being sued jointly and severally in relation to the firm’s contracts or tortious acts.

Limited- liability companies, or corporations, unlike partnerships, are formed not simply by 18)__________ entered into between their first members; they must also be 19)__________ at a public office or 20)__________ designated by law or otherwise obtain official acknowledgement of their existence.

J Registration of New Companies

Match the following titles from the regulations for registration to the extracts from the details.

Titles

1What are articles of association? ___c___

2 Can anyone be a company director? _______

3 What company types are there? _______

4 What is the minimum number of officers a

company requires? _______

5 Who can form a company? _______

6 Can I choose any name I want for my company? _______

7 How do I form a company? _______

8 What is a registered office? _______

9 What is a memorandum of association? _______

Extracts from the details

a	One or more persons but a public company or an unlimited company must have at least two subscribers.
b	It is the address of a company to which Companies House letters and reminders will be sent.
c	This document sets out the rules for running the company’s internal affairs.
d	By sending a memorandum of association, the articles of association, the details of the company secretary, and a statement of legal compliance.
e	On condition that you are not:
	• an undischarged bankrupt or disqualified by a court from holding a directorship; • over 70 years of age.
f	This document sets out the company’s name, the address of the company’s registered office and the object of the company.
g	Private companies limited by shares, private companies limited by guarantee, private unlimited companies, public limited companies.
h	You cannot:
	• register the same name as another company;
	• use certain words;
	• use names likely to cause offence.
i	Every company must have formally appointed company officers
	at all times.

A private company must have at least:

• one director;

• one secretary — formal qualifications are not required. A company’s sole director cannot also be the company secretary.

A public company must have at least:

• two directors;

• one secretary- formally qualified.