1.
Corporate law
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Corporate law is the practice or study of how shareholders, directors, employees, creditors, and other stakeholders such as consumers, the community, and the environment interact with one another. Corporate law is a part of a broader companies law, other types of business associations can include partnerships, or trusts, or companies limited by guarantee. Under corporate law, corporations of all sizes have separate legal personality, shareholders control the company through a board of directors which, in turn, typically delegates control of the corporations day-to-day operations to a full-time executive. Corporate law deals with firms that are incorporated or registered under the corporate or company law of a state or their subnational states. Corporate law is divided into corporate governance and corporate finance. The word corporation is generally synonymous with large publicly owned companies in the United States, in United Kingdom, company is more frequently used as the legal term for any business incorporated under the Companies Act 2006. Large scale companies will be PLCs in the United Kingdom and will usually have shares listed on a Stock Market. In British legal usage any registered company, created under the Companies Act 2006 and previous equivalent legislation, is, strictly, such a company is created by the administrative process of registration under the Companies Act as a general piece of legislation. A corporation, in this British sense, can be a corporation sole which consists of an office occupied by one person e. g. the monarch or certain bishops in England. Here, the office is recognized as separate from the individual who holds it, in the United States, a company may or may not be a separate legal entity, and is often used synonymously with firm or business. A corporation may accurately be called a company, however, a company should not necessarily be called a corporation, which has distinct characteristics. According to Blacks Law Dictionary, in America a company means a corporation — or, less commonly, the defining feature of a corporation is its legal independence from the people who create it. If a corporation fails, its shareholders will lose their money, shareholders are not liable for any remaining debts owed to the corporations creditors. This rule is called limited liability, and it is why corporations end with Ltd, in the words of British judge, Walton J, a company is. only a juristic figment of the imagination, lacking both a body to be kicked and a soul to be damned. But despite this, under just about every system in existence and as per international norms, corporations have the same legal rights. Corporations can exercise human rights against real individuals and the state, just as they are born into existence through its members obtaining a certificate of incorporation, they can die when they lose money into insolvency. Corporations can even be convicted of offences, such as fraud. Although some forms of companies are thought to have existed during Ancient Rome and Ancient Greece, with increasing international trade, Royal charters were granted in Europe to merchant adventurers
2.
Australian corporate law
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Australian corporations law has historically borrowed heavily from UK company law. Its legal structure now consists of a single, national statute, the statute is administered by a single national regulatory authority, the Australian Securities and Investments Commission. The two federal statutes are the Corporations Act 2001 and Australian Securities and Investments Commission Act 2001, the corporations legislation is administered by the Australian Securities and Investments Commission, which reports to the Treasurer. Since provisions in the Act can frequently be traced back to some pioneer legislation in the United Kingdom, on the settlement of Australia by British colonists in 1788 the power in relation to corporations was controlled by the United Kingdom. As colonies gained independence, and their own parliaments, the power to control corporations passed to these parliaments. Each of the colonies passed laws in relation to the regulation of corporations, laws between states and territories were inconsistent. A later attempt at complex cross-vesting arrangements by the states, territories and it was after this, in 2001, that the current arrangement, where the states refer their power to the Commonwealth in respect of corporations was created. Australian law, like English law, recognises a kind of called the corporation sole. However, there are few cases of such corporations, the sole is excluded from the Australian statutory definition of corporation. A proprietary company, under CA2001 s 45A is one which has the suffix Pty Ltd and this form of business entity has similar characteristics to the Limited Liability Company, or LLC, that is a commonly used term in multiple jurisdictions around the world. Austin J held that it was a responsibility to have functioning financial and audit committees with independent directors, as well as internal review. The ASX Corporate Governance Councils Best Practice Recommendation 2.3 states the CEO, the ASX CGCBPR2.1 states there should be a majority of independent directors, and the chair should be independent. Under ASX CGCBPR8.1, the companies should have a remuneration committee, under ASX CGCBPR4.2 an audit committee should have at least three members, with a majority independent, and be chaired by an independent director, not including the chairman. Australia has strong rules, similar to those found across the Commonwealth, for public companies, under CA2001 section 203D there must be a meeting with two months notice where the director has a right to be heard. For private companies which do not offer shares to the public, and have under 50 shareholders, in Lee v Chou Wen Hsien 1 WLR1202, the Privy Council advised that a private company was permitted to have a provision for directors to remove other directors. Removal from office does not affect a directors claim for breach of contract, under CA2001 s 201H the directors of a public company can make the appointments of other directors. However, unlike the UK, if that happens, those new directors must be confirmed at the general meeting. This rule can be replaced, so it would be possible for a company to require that shareholders make all appointments, the Corporations Act 2001 contains a default rule in section 250E that shareholders have one vote per share
3.
British Virgin Islands company law
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The British Virgin Islands has approximately 30 registered companies per head of population, which is probably the highest ratio of any country in the world. Annual company registration fees provide a significant part of Government revenue in the British Virgin Islands, accordingly, company law forms a much more prominent part of the law of the British Virgin Islands than might otherwise be expected. The first companies legislation in the British Virgin Islands was the Companies Act,1884, however the great leap forward for company law in the jurisdiction occurred in 1984 with the passing of the International Business Companies Act,1984. The International Business Companies Act was enormously successful, and resulted in the registration of a number of companies. However, in the early 2000s the British Virgin Islands came under pressure to repeal statutes such as the International Business Companies Act which provided for ring-fenced taxation. The change had little impact on incorporation rates as the British Virgin Islands imposes virtually no form of direct taxation. In the British Virgin Islands, only a licensed registered agent can form a company and it is not possible for a member of the public to do so. The principal reason for this is to reinforce anti-money laundering obligations under the Anti-Money Laundering, any person who wishes to form a registered company must do so through a licensed agent, and the agent is required to obtain client due diligence to comply with the regulations. Almost all companies formed in the British Virgin Islands are now registered under the BVI Business Companies Act, in addition there are a small number of statutory corporations, most of which serve some kind of public function. All segregated portfolio companies are required to include the designation within their name, a restricted purpose company is a special type of company intended for use in bankruptcy remote bond issues, and which only has limited corporate capacity to undertake certain specific purposes. Slightly unusually, in the British Virgin Islands the formation of a company does not involve the issuing of subscriber shares, accordingly, when a company is incorporated it initially has no members. The registered agent has a power to appoint the first directors of the company. However, until the first shares are issued the directors are personally liable for anything which they do in the name of the company, in the British Virgin Islands a company has separate legal personality from its members. The liability of the members of a company is limited to their shares or the amount of their guarantee, similarly, directors or officers of a company are not normally liable for the companys debts except insofar as they may otherwise be liable for their own conduct or actions. Conversely, the assets of a company are regarded as belonging solely to the company, the corporate constitution of a private company registered under the BVI Business Companies Act consists of the memorandum and articles of association. The memorandum and articles of association of a company are available for inspection at the Companies Registry. Any amendment to the memorandum or articles normally becomes effective when filed at the Companies Registry. In exceptional circumstances the court has power to order that an amendment should take effect at an earlier date, however shareholders agreements are not publicly filed in the British Virgin Islands
4.
Canadian corporate law
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Canadian company law concerns the operation of corporations in Canada, which can be established under either federal or provincial authority. Federal incorporation of corporations is governed by Corporations Canada under the Canada Business Corporations Act. All of the Canadian provinces and territories also have laws permitting the incorporation of corporations within their area of jurisdiction, when it was introduced into UK company law by the Companies Act 1862 as a matter of general application, the Canadian colonies introduced legislation to enable the same locally. In 1914, in John Deere, it was held that the provinces could not interfere with an incorporated company by requiring them to be registered locally in order to conduct business. It was in this manner that the Canadian Pacific Railway was originally formed, the articles of incorporation can provide for different classes of shares. Like most of the Commonwealth and Europe, the one share, one vote principle prevails in public companies, shareholders must elect directors at each annual meeting, and, where the articles are silent, directors remain in office until the annual meeting after their election. There can be staggered boards, but any director’s term is limited to three annual meetings, Directors elected by a particular class cannot be removed without consent of that class. All changes in directors have to be filed with the registrar, in October 2012, the TSX also issued a proposal to require majority voting at uncontested elections. The larger pension plans and other investment funds have instituted practices relating to the behaviour that is expected of the companies they invest in, publications in that regard include, Proxy Voting Principles and Guidelines. 2013 Best Practices for Proxy Circular Disclosure, Proxy Voting by Canadian Mutual Funds 2006–2009. On September 29,2016 the Financial Post reported that a Bill introduced in Parliament would vanquish zombie directors who fail to win majority shareholder votes Directors set their own remuneration and they have a fiduciary duty to not put their own interests first when setting it. Otherwise the remuneration committee should be composed of independent directors, there is no say on pay rule in the CBCA. However, a number of Canadian companies have been having say on pay votes. Under s.140 of the CBCA, all shareholders have the right to vote, shareholders holding the same class of shares must be treated equally, and so, for instance, no voting ceilings are allowed. With 5% of the rights, known as a requisition. Uniquely, under s.137 of the CBCA, a holder of shares may submit a proposal. This means a group of people who sit behind investment dealers or other intermediaries in the investment chain are now enfranchised. 137 the only way to challenge this is by application to a court, the proposal also has to not have been submitted within the last 5 years, if the last time it got less than 3%, 6% or 10% of the votes
5.
Cayman Islands company law
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Cayman Islands company law is primarily codified in the Companies Law, and to a lesser extent in the Securities and Investment Business Law. The Cayman Islands is a leading Offshore Financial Centre, and financial services forms a significant part of the economy of the Cayman Islands, accordingly company law forms a much more prominent part of the law of the Cayman Islands than might otherwise be expected. There are broadly two types of company in the Cayman Islands, the first, and more prevalent, are companies formed under the Companies Law. Such companies may be formed as ordinary resident companies, ordinary non-resident companies, exempted companies, the second is limited liability companies formed under the Limited Liability Companies Law,2016. LLCs are a form of hybrid between companies and partnerships, in practice, companies are almost invariably formed by professional trust companies rather than members of the public. Under the Companies Law it is possible to register companies as either a limited by shares or a company limited by guarantee. A company limited by guarantee may also be incorporated with a share capital, in practice the vast majority of companies are incorporated as companies limited by shares. Where a company will carry out its business principally outside of the Cayman Islands and this broadly replicates the International Business Company concept from other jurisdictions, except that in relation to exempt companies, there is no tax saving. The main benefit of registering as a company is that exempt companies do not need to file accounts. Exempted companies can also be registered as limited companies, or as special economic zone companies. In the Cayman Islands company may also further be registered specifically as segregated portfolio company, a segregated portfolio company is a company which segregates the assets and liabilities of different classes of shares from each other and from the general assets of the company. All segregated portfolio companies are required to include the designation SPC or “Segregated Portfolio Company” in full within their name, in the Cayman Islands a company has separate legal personality from its members ). The liability of the members of a company is limited to their shares or the amount of their guarantee, similarly, directors or officers of a company are not normally liable for the companys debts except insofar as they may otherwise be liable for their own conduct or actions. Conversely, the assets of a company are regarded as belonging solely to the company, the corporate constitution of a private company registered under the Companies Law consists of the memorandum and articles of association. Companies may adopt the form of Articles set out in Schedule 1 to the Companies Law. The memorandum and articles of association of a company are filed with the Companies Registry but are not available for public inspection, any amendment to the memorandum or articles normally becomes effective upon the passing of the special resolution. The company is required to file the special resolution with the Companies Registry. Once adopted, the memorandum and articles bind the company and each member of the company as if they had executed by the same under seal
6.
South African company law
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South African company law is that body of rules which regulates corporations formed under the Companies Act. A company is an organisation which earns income by the production or sale of goods or services. This entry also covers rules by which partnerships and trusts are governed in South Africa, together with cooperatives, a company has three distinguishing features, its legal separateness from the people involved in it—specifically from its owners, called shareholders, its potential immortality, and its size. The same generally applies, however, to businesses which are not companies. There is also, more importantly, usually a separation between the company and its owners, the locus classicus for the principle that a company is a separate entity from its directors and shareholders is the landmark English case of Salomon v Salomon. The separation between the shareholder and the company has one important consequence. If a company is wound up, its shareholders will lose their stake, if, on the other hand, an unincorporated business should go bankrupt, its owners, who do not enjoy such separation, will be liable for its debts. It has rights and duties, but not the body, of a natural person, Companies range from the very small to the very large. There are no large businesses which are not companies. It is important at the outset to appreciate what, exactly, is meant by holding a share in a company. The fact that a person is a shareholder of Pick n Pay does not entitle him to go along to one of its branches and his share in Pick n Pay does not take the form of its stock. Before the Industrial Revolution, companies were a rare business form. Until 1844, there was no legislation governing companies, so that they had to be incorporated by a specific Act of Parliament. Such was the case with the British East India Company in 1600, the Joint Stock Companies Act 1844 was the first piece of legislation which would be recognised as modern company law, but it was fairly limited in scope. The concept of limited liability, for instance, was not considered and this omission was remedied by the Joint Stock Companies Act 1856, which also introduced the suffix Ltd to the company name. It is still in use today, the first South African company legislation was the Companies Act of 1926, which was based on the Transvaal Companies Act, which was in turn based on the British Companies Act 1908. The next major South African legislation in this area was the Companies Act of 1973, the 1973 Act had over the years been amended on numerous occasions to bring it up to date, it had as a consequence, like the Income Tax Act, become unwieldy. Changes in society, and in the way the international community expects businesses to operate, also demanded the introduction of new concepts like stakeholder rights and corporate governance
7.
United States corporate law
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United States corporate law regulates the governance, finance and power of corporations in US law. The US Constitution was interpreted by the US Supreme Court to allow corporations to incorporate in the state of their choice, twenty-four states follow the Model Business Corporation Act, while New York and California are important due to their size. At the Declaration of Independence, corporations had been unlawful without explicit authorization in a Royal Charter or an Act of Parliament of the United Kingdom, since the worlds first stock market crash corporations were perceived as dangerous. Corporations were only thought to be legitimate in specific industries that could not be managed efficiently through partnerships, after the US Constitution was ratified in 1788, corporations were still distrusted, and were tied into debate about interstate exercise of sovereign power. The First Bank of the United States was chartered in 1791 by the US Congress to raise money for the government and it had private investors, but faced opposition from southern politicians who feared federal power overtaking state power. So, the First Banks charter was written to expire in 20 years, State governments could and did also incorporate corporations through special legislation. In 1811, New York became the first state to have a simple registration procedure to start corporations for manufacturing business. It also allowed investors to have limited liability, so if the enterprise went bankrupt investors would lose their investment. An early US Supreme Court case, Trustees of Dartmouth College v Woodward, States quickly reacted by reserving the right to regulate future dealings by corporations. Generally speaking, corporations were treated as persons with separate legal personality from its shareholders, directors or employees. Over the late 19th century, more and more states allowed free incorporation of businesses with a registration procedure. Many corporations would be small and democratically organized, with one-person, one-vote, no matter what amount the investor had, however, the dominant trend led towards immense corporate groups where the standard rule was one-share, one-vote. At the end of the 19th century, trust systems were used to concentrate control into the hands of a few people, or a single person. By the end of the First World War, it was perceived that ordinary people had little voice compared to the financial oligarchy of bankers. In particular, employees lacked voice compared to shareholders, but plans for an industrial democracy did not become widespread. Through the 1920s, power concentrated in fewer hands as corporations issued shares with voting rights. This practice was halted in 1926 by public pressure and the New York Stock Exchange refusing to list non-voting shares, New shareholders had no power to bargain against large corporate issuers, but still needed a place to save. Before the Wall Street Crash of 1929, people were being sold shares in corporations with fake businesses, as accounts, the Wall Street Crash saw the total collapse of stock market values, as shareholders realized that corporations had become overpriced
8.
Corporate law in Vietnam
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Corporate law in Vietnam was originally based on the French commercial law system. However, since Vietnams independence in 1945, it has largely influenced by the ruling Communist Party. Currently, the sources of Corporate Law are the Law on Enterprises, the Law on Securities. Corporate law in Vietnam is largely influenced by French laws due to its colonial past, after the 1954 Geneva Conference, Vietnam separated into two zones, the North and the South. In 1980, after the North took control of the South, in 1986, the government initiated economic reforms to the corporate sector to reinvigorate the ailing economy. These policies aimed to reverse most of policies that led to crises in the 1970s and 1980s following the Vietnam War. Development of the sector was encouraged and the economy was liberalized in hopes of increasing the potential for economic development. In 1987, the Law on Foreign Investment was passed, allowing foreign investors into the country, in 1990, the Law on Private Enterprises and Companies Law were introduced to boost economic development. They were subsequently superseded by the Law on Enterprises in 1999, within three years of implementing the LOE, over 70,000 enterprises were registered as compared to just over 40,000 for the previous nine years. Law on Investment and a new LOE were enacted in 2005 and these statutes are expected to further strengthen Vietnams economy and its potential for international economic integration. The Constitution - Mainly seen as the ultimate Party policy documents,4 different versions Legislation - Originated from civil law passed down from the French. The LOE governs business enterprises in Vietnam, Enterprises in all economic sectors have to satisfy the stipulated conditions accounted for in Article 7. There are 4 forms of business enterprises, an LLC is established by members capital contribution to the company. As a LLC is an entity separate from the owners. LLCs exist in two forms - one-member LLC, or multi-member LLC, the former is owned by an organisation/individual, while the latter allows for two to fifty members. The management structure consists of a Members Council, Chairperson of the MC, where there are more than 11 members in LLC, an Inspection Committee must also be established. An SC is an entity with at least three shareholders, where ownership of the firm depends on the number of shares they hold and it is the only form of enterprise that can issue securities to raise capital. Shareholders liability is limited to their contribution, however, shareholders can be personally liable where the company is substantially undercapitalised on formation
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French company law
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French company law is the law governing corporations incorporated in France or under French corporate law. In the wake of the French Revolution in 1791, the right to free registration for all companies was proclaimed. There was a boom in registrations, but this was followed by a bust in 1793, the law was reversed until 1796 when the principle of free incorporation was established again. The law was consolidated in Napoleons Code de commerce of 1807 using a concession system, while previously public companies with special privileges were created by a special act of the state, the Code allowed the companies to be formed according to general company law rules. Specific state permission was still required, article 33 recognised limited liability for members. The Code de commerce was applicable outside France in Baden and the Prussian Rhine province, the first German public company statute was the Prussian Act of 1843, five years after the Prussian Act on railway enterprises of 1838. Under the Loi sur les Sociétés of 1867 France adopted a system for registration of companies. Code de Commerce UK company law European company law German company law US corporate law List of company registers
10.
German company law
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German company law is an influential legal regime for companies in Germany. The primary form of company is the company or Aktiengesellschaft. The private company limited liability is known as a Gesellschaft mit beschränkter Haftung. A partnership is called a Kommanditgesellschaft, in Germany, through most of the 19th century the Kommanditgesellschaft was the typical form of business organisation. A KG had at least one member with unlimited liability, a special concession was not required for setting up this company. The first German public company statute was the Prussian Act of 1843, in 1861 the Allgemeines Deutsches Handelsgesetzbuch or the General Commercial Code for all of Germany, as well as Austria, was enacted, which devoted a section to joint stock companies. This allowed incorporation with limited liability, There were updates to the Allgemeines Deutsches Handelsgesetzbuch in the Aktiennovelle von 1870 and again in 1884. The members of the board were not allowed to serve on the management board. However, shareholders could still directly elect management board members if they so wished, further reforms led to the Handelsgesetzbuch of 1897, but without changing the basic structure. The voting rights of shareholders are heavily influenced by the banks, banks appropriate the votes of people who must deposit their share certificates in banks’ accounts. The notable rights for shareholders are as follows the right to vote, preferential shares without voting rights can, however, be issued. The use of profits from the accounts, AktG §119 appointment of auditors, AktG §119 raising or reducing capital, AktG §119 winding up, German directors have similar duties to most jurisdictions, primarily a duty of loyalty, and a duty to exercise competent judgment. First, the duty of loyalty, or Treuepflicht, derives from the good faith provision in the civil code, second, there is a particular prohibition on taking corporate opportunities and a duty of secrecy, AktG §93. Third, there is a prohibition on competing with the company. Fourth, recently introduced was a ‘business judgment rule’, a new provision, AktG §93 says, ‘executive members have to exercise the care of an ordinary and conscientious business leader’. Under AktG §147, ten per cent of shareholders, or those with over €1,000,000 may bring a claim against a director for breach of duty and they will have a special representative appointed to carry out the litigation and the company will pay the costs. There is also a procedure for one per cent of shareholders, here the court is more stringent, and like the derivative claim in the UK can strike out an application if it finds reasons for it are lacking. Analogous to the UK Corporate Governance Code, which is also a ‘comply or explain’ law, is the Deutsche Corporate Governance Kodex and it replicates a lot of rules already found in the Aktiengesetz
11.
United Kingdom company law
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The United Kingdom company law regulates corporations formed under the Companies Act 2006. Also governed by the Insolvency Act 1986, the UK Corporate Governance Code, European Union Directives and court cases, the company is the primary legal vehicle to organise and run business. Tracing their modern history to the late Industrial Revolution, public companies now employ more people, Company law, or corporate law, can be broken down into two main fields. Corporate governance in the UK mediates the rights and duties among shareholders, employees, since the board of directors habitually possesses the power to manage the business under a company constitution, a central theme is what mechanisms exist to ensure directors accountability. UK law is shareholder friendly in that shareholders, to the exclusion of employees, the general meeting holds a series of minimum rights to change the company constitution, issue resolutions and remove members of the board. In turn, directors owe a set of duties to their companies, Directors must carry out their responsibilities with competence, in good faith and undivided loyalty to the enterprise. If the mechanisms of voting do not prove enough, particularly for minority shareholders, directors duties, of central importance in public and listed companies is the securities market, typified by the London Stock Exchange. Through the Takeover Code the UK strongly protects the right of shareholders to be treated equally and freely trade their shares, Corporate finance concerns the two money raising options for limited companies. Equity finance involves the method of issuing shares to build up a companys capital. Debt finance means getting loans, usually for the price of an annual interest repayment. Creditors are also, to some extent, protected by courts power to set aside unfair transactions before a company goes under, if a company is unable to pay its debts as they fall due, UK insolvency law requires an administrator to attempt a rescue of the company. If rescue proves impossible, a companys life ends when its assets are liquidated, distributed to creditors, if a company becomes insolvent with no assets it can be wound up by a creditor, for a fee, or more commonly by the tax creditor. Company law in its modern shape dates from the mid-19th century, in medieval times traders would do business through common law constructs, such as partnerships. Whenever people acted together with a view to profit, the law deemed that a partnership arose, early guilds and livery companies were also often involved in the regulation of competition between traders. As England sought to build a mercantile Empire, the government created corporations under a Royal Charter or an Act of Parliament with the grant of a monopoly over a specified territory, the best known example, established in 1600, was the British East India Company. Queen Elizabeth I granted it the right to trade with all countries to the east of the Cape of Good Hope. Corporations at this time would act on the governments behalf. A similar chartered company, the South Sea Company, was established in 1711 to trade in the Spanish South American colonies, in fact the Spanish remained hostile and let only one ship a year enter
12.
Company
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A company, abbreviated co. is a legal entity made up of an association of people, be they natural, legal, or a mixture of both, for carrying on a commercial or industrial enterprise. Company members share a common purpose and unite in order to focus their various talents and organize their collectively available skills or resources to achieve specific, because companies are legal persons, they also may associate and register themselves as companies – often known as a corporate group. When the company closes it may need a certificate to avoid further legal obligations. A company can be defined as a person, invisible, intangible, created by or under law, with a discrete legal personality, perpetual succession. It is not affected by the death, insanity, or insolvency of an individual member, by 1303, the word referred to trade guilds. Usage of company to mean business association was first recorded in 1553, in English law and in legal jurisdictions based upon it, a company is a body corporate or corporation company registered under the Companies Acts or similar legislation. It may be referred to as a firm, in the US, a company is not necessarily a corporation. Commonly used where companies are formed for non-commercial purposes, such as clubs or charities, the members guarantee the payment of certain amounts if the company goes into insolvent liquidation, but otherwise they have no economic rights in relation to the company. This type of company is common in England, a company limited by guarantee may be with or without having share capital. The most common form of used for business ventures. This type of company is common in England and many English-speaking countries, a company limited by shares may be a publicly traded company or a privately held company. A company limited by guarantee with a share capital, a hybrid entity, usually used where the company is formed for non-commercial purposes, but the activities of the company are partly funded by investors who expect a return. This type of company may no longer be formed in the UK, a company—statutorily authorized in certain states—that is characterized by limited liability, management by members or managers, and limitations on ownership transfer, i. e. L. L. C. LLC structure has been called hybrid in that it combines the characteristics of a corporation, an unlimited company with or without a share capital. A hybrid entity, a company where the liability of members or shareholders for the debts of the company are not limited, in this case doctrine of veil of incorporation does not apply. Less common types of companies are, Companies formed by letters patent, most corporations by letters patent are corporations sole and not companies as the term is commonly understood today. Before the passing of modern companies legislation, these were the types of companies. Now they are rare, except for very old companies that still survive
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Cooperative
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Cooperatives frequently have social goals which they aim to accomplish by investing a proportion of trading profits back into their communities. As an example of this, in 2013, retail co-operatives in the UK invested 6. 9% of their profits in the communities in which they trade as compared with 2. 4% for other rival supermarkets. The International Co-operative Alliance was the first international association formed by the cooperative movement and it includes the World Council of Credit Unions. A second organization was formed later in Germany, the International Raiffeisen Union, in the United States, the National Cooperative Business Association serves as the sectors oldest national membership association. It is dedicated to ensuring that cooperative businesses have the same opportunities as other businesses operating in the country, a U. S. National Cooperative Bank was formed in the 1970s. By 2004, a new association focused on worker co-ops was founded, since 2002 cooperatives and credit unions could be distinguished on the Internet by use of a. coop domain. Since 2014, following International Cooperative Alliances introduction of the Cooperative Marque, ICA cooperatives, cooperation dates back as far as human beings have been organizing for mutual benefit. Tribes were organized as cooperative structures, allocating jobs and resources among each other, in alpine environments, trade could only be maintained in organized cooperatives to achieve a useful condition of artificial roads such as Viamala in 1472. Pre-industrial Europe is home to the first cooperatives from an industrial context, in 1761, the Fenwick Weavers Society was formed in Fenwick, East Ayrshire, Scotland to sell discounted oatmeal to local workers. Its services expanded to include assistance with savings and loans, emigration and education, owen left New Lanark to pursue other forms of cooperative organization and develop coop ideas through writing and lecture. Cooperative communities were set up in Glasgow, Indiana and Hampshire, in 1828, William King set up a newspaper, The Cooperator, to promote Owens thinking, having already set up a cooperative store in Brighton. The Rochdale Society of Equitable Pioneers, founded in 1844, is considered the first successful cooperative enterprise, used as a model for modern coops. A group of 28 weavers and other artisans in Rochdale, England set up the society to open their own store selling food items they could not otherwise afford, within ten years there were over a thousand cooperative societies in the United Kingdom. Other events such as the founding of a society by the Tolpuddle Martyrs in 1832 were key occasions in the creation of organized labor. Cooperatives traditionally combine social benefit interests with capitalistic property-right interests, Cooperatives achieve a mix of social and capital purposes by democratically governing distribution questions by and between equal by not controlling members. Democratic oversight of decisions to equitably distribute assets and other benefits means capital ownership is arranged in a way for social benefit inside the organization, external societal benefit is also encouraged by incorporating the operating-principle of cooperation between co-operatives. In the final year of the 20th century, cooperatives banded together to establish a number of social enterprise agencies which have moved to adopt the cooperative model. In the years 1994–2009 the EU and its member nations gradually revised national accounting systems to make visible the increasing contribution of social economy organizations, the roots of the cooperative movement can be traced to multiple influences and extend worldwide
14.
Corporation
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A corporation is a company or group of people authorized to act as a single entity and recognized as such in law. Early incorporated entities were established by charter, most jurisdictions now allow the creation of new corporations through registration. Corporations chartered in regions where they are distinguished by whether they are allowed to be for profit or not are referred to as for profit and not-for-profit corporations, there is some overlap between stock/non-stock and for profit/not-for-profit in that not-for-profit corporations are always non-stock as well. A for profit corporation is almost always a stock corporation, registered corporations have legal personality and are owned by shareholders whose liability is limited to their investment. Shareholders do not typically actively manage a corporation, shareholders instead elect or appoint a board of directors to control the corporation in a fiduciary capacity, in American English, the word corporation is most often used to describe large business corporations. In British English and in the Commonwealth countries, the company is more widely used to describe the same sort of entity while the word corporation encompasses all incorporated entities. In American English, the company can include entities such as partnerships that would not be referred to as companies in British English as they are not a separate legal entity. Despite not being human beings, corporations, as far as the law is concerned, are legal persons. Corporations can exercise human rights against real individuals and the state, Corporations can be dissolved either by statutory operation, order of court, or voluntary action on the part of shareholders. Corporations can even be convicted of offenses, such as fraud. However, corporations are not considered living entities in the way humans are. While not a corporation, this new type of entity became very attractive as an alternative for corporations not needing to issue stock, in Germany, the organization was referred to as Gesellschaft mit beschränkter Haftung or GmbH. In the last quarter of the 20th Century this new form of organization became available in the United States and other countries. Since the GmbH and LLC forms of organization are technically not corporations they will not be discussed in this article, the word corporation derives from corpus, the Latin word for body, or a body of people. By the time of Justinian, Roman law recognized a range of corporate entities under the names universitas and these included the state itself, municipalities, and such private associations as sponsors of a religious cult, burial clubs, political groups, and guilds of craftsmen or traders. Such bodies commonly had the right to own property and make contracts, to receive gifts and legacies, to sue and be sued, private associations were granted designated privileges and liberties by the emperor. Entities which carried on business and were the subjects of rights were found in ancient Rome. In medieval Europe, churches became incorporated, as did local governments, such as the Pope, the point was that the incorporation would survive longer than the lives of any particular member, existing in perpetuity
15.
Partnership
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A partnership is an arrangement where parties, known as partners, agree to cooperate to advance their mutual interests. The partners in a partnership may be individuals, businesses, interest-based organizations, schools, organizations may partner together to increase the likelihood of each achieving their mission and to amplify their reach. A partnership may result in issuing and holding equity or may be governed by a contract. In this case, the alliance may be structured in a process comparable to a Mergers & Acquisitions transaction, Partnerships present the involved parties with complex negotiation and special challenges that must be navigated unto agreement. Once agreement is reached, the partnership is typically enforceable by civil law, Partners who wish to make their agreement affirmatively explicit and enforceable typically draw up Articles of Partnership. It is common for information about formally partnered entities to be public, such as through a press release. While industrial partnerships stand to amplify mutual interests and accelerate success, when a politician, for example, partners with a corporation to advance the latters interest in exchange for some benefit, a conflict of interest results, consequentially, the public good may suffer. While technically lawful in some jurisdictions, such practice is viewed negatively or as corruption. Partnerships recognized by a government body may enjoy special benefits from taxation policy, in such countries, partnerships are often regulated via anti-trust laws, so as to inhibit monopolistic practices and foster free market competition. Enforcement of the laws, however, varies considerably, domestic partnerships recognized by governments typically enjoy tax benefits, as well. Under common law systems, the basic form of partnership is a general partnership. There are two types of partners, general partners have an obligation of strict liability to third parties injured by the Partnership. General partners may have joint liability or joint and several liability depending upon circumstances, the liability of limited partners is limited to their investment in the partnership. Summarising s.5 of the Partnership Act 1958, for a partnership in Australia to exist and they are, Valid Agreement between the parties, To carry on a business – this is defined in s. A partnership is defined as the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all, the law does not require written partnership agreement between the partners to form a partnership. A partnership does not also required to be registered, however an unregistered partnership has a number of limitation regarding enforcing its rights in any court, a partnership is considered as a separate legal identity in Bangladesh only if the partnership is registered. There must be a minimum of 2 partners and maximum of 20 partners, statutory regulation of partnerships in Canada fall under provincial jurisdiction. A partnership is not a legal entity and partnership income is taxed at the rate of the partner receiving the income
16.
General partnership
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In most countries, a general partnership is an association of persons or an unincorporated company with the following major features, Created by agreement, proof of existence and estoppel. Formed by two or more persons The owners are all personally liable for any actions and debts the company may face. It is a partnership in which partners share equally in both responsibility and liability, partnerships have certain default characteristics relating to both the relationship between the individual partners and the relationship between the partnership and the outside world. The former can generally be overridden by agreement between the partners, whereas the latter generally cannot be overridden this way. The assets of the business are owned on behalf of the other partners, for example, if a partnership defaults on a payment to a creditor, the partners personal assets are subject to attachment and liquidation to pay the creditor. By default, profits are shared equally amongst the partners, however, a partnership agreement will almost invariably expressly provide for the manner in which profits and losses are to be shared. Each general partner is deemed the agent of the partnership, therefore, if that partner is apparently carrying on partnership business, all general partners can be held liable for his dealings with third persons. By default a partnership will terminate upon the death, disability, however, most partnership agreements provide for these types of events, with the share of the departed partner usually being purchased by the remaining partners in the partnership. By default, each partner has an equal right to participate in the management. However, in a partnership of any size the partnership agreement will provide for certain electees to manage the partnership along the lines of a company board, a partners judgment creditor may obtain an order charging the partners transferable interest to satisfy a judgment. There has been debate in most states as to whether a partnership should remain aggregate or be allowed to become a business entity with a separate continuing legal personality. In the United States, section 201 of the Revised Uniform Partnership Act of 1997 provides that A partnership is an entity distinct from its partners, in England and Wales, a partnership does not have separate legal personality. In Scotland partnerships do have some degree of legal personality, in Bangladesh, the relevant law for regulating partnership is the Partnership Act 1932. A partnership is defined as the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all, the law does not require written partnership agreement between the partners to form a partnership. A partnership does not also required to be registered, however an unregistered partnership has a number of limitation regarding enforcing its rights in any court, a partnership is considered as a separate legal identity in Bangladesh only if the partnership is registered. There must be a minimum of 2 partners and maximum of 20 partners, articles of partnership Investment clubs Types of business entity DeMott, Deborah A. “Transatlantic Perspectives on Partnership Law, Risk and Instability”, journal of Corporation Law,26, 879–895
17.
Limited partnership
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The GPs are, in all major respects, in the same legal position as partners in a conventional firm, i. e. Like shareholders in a corporation, limited partners have limited liability and this means that the limited partners have no management authority, and are not liable for the debts of the partnership. The limited partnership provides the limited partners a return on their investment, General Partners thus bear more economic risk than do limited partners, and in cases of financial loss, the GPs will be the ones which are personally liable. Limited partners are subject to the same alter-ego piercing theories as corporate shareholders, however, it is more difficult to pierce the limited partnership veil because limited partnerships do not have many formalities to maintain. So long as the partnership and the members do not co-mingle funds, Partnership interests are afforded a significant level of protection through the charging order mechanism. The charging order limits the creditor of a debtor-partner or a debtor-member to the share of distributions. When the partnership is being constituted, or the composition of the firm is changing, Limited partners must explicitly disclose their status when dealing with other parties, so that such parties are on notice that the individual negotiating with them carries limited liability. Limited partnerships are distinct from limited liability partnerships, in which all partners have limited liability, in some jurisdictions, the limited liability of the limited partners is contingent on their not participating in management. The societates publicanorum, which arose in Rome in the third century BC, during the heyday of the Roman Empire, they were roughly equivalent to todays corporations. Some had many investors, and interests were publicly tradable, however, they required at least one partners with unlimited liability. According to Jairus Banaji, the Qirad and Mudaraba institutions in Islamic law, in medieval Italy, a business organization known as the commenda appeared in the 10th century that was generally used for financing maritime trade. In a commenda, the trader of the ship had limited liability. In contrast, his investment partners on land had unlimited liability and were exposed to risk, a commenda was not a common form for a long-term business venture as most long-term businesses were still expected to be secured against the assets of their individual proprietors. As an institution, the commenda is very similar to the qirad but whether the qirad transformed into the commenda, colberts Ordinance and the Napoleonic Code reinforced the limited partnership concept in European law. In the United States, limited partnerships became available in the early 19th century. Britain enacted its first limited partnership statute in 1907, for a list of types of corporation and other business types by country, see Types of business entity. They are also useful in labor-capital partnerships, where one or more financial backers prefer to contribute money or resources while the other partner performs the actual work, in such situations, liability is the driving concern behind the choice of limited partnership status. The limited partnership is also attractive to firms wishing to provide shares to individuals without the additional tax liability of a corporation
18.
Limited liability partnership
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A limited liability partnership is a partnership in which some or all partners have limited liabilities. It therefore exhibits elements of partnerships and corporations, in an LLP, one partner is not responsible or liable for another partners misconduct or negligence. This is an important difference from the traditional unlimited partnership under the Partnership Act 1890, in each partner has joint. In an LLP, some partners have a form of limited liability similar to that of the shareholders of a corporation, in some countries, an LLP must also have at least one thing called as a general partner with unlimited liability. Unlike corporate shareholders, the partners have the right to manage the business directly, in contrast, corporate shareholders have to elect a board of directors under the laws of various state charters. The board organizes itself and hires corporate officers who then have as corporate individuals the legal responsibility to manage the corporation in the corporations best interest, a LLP also contains a different level of tax liability from that of a corporation. As a result, in countries, the LLP is more suited for businesses in which all investors wish to take an active role in management. In Nigeria, limited liability partnerships have legal personality, however, one must register a partnership first before it can gain the status of limited liability partnership. For a fuller country-by-country listing of types of partnerships and companies, All provinces, except Yukon, Prince Edward Island and Nunavut, have permitted LLPs for lawyers and accountants. In British Columbia, the Partnership Amendment Act,2004 permitted LLPs for lawyers, in China, the LLP is known as a Special general partnership. The organizational form is restricted to knowledge-based professions and technical service industries, the structure shields co-partners from liabilities due to the willful misconduct or gross negligence of one partner or a group of partners. The German Partnerschaftsgesellschaft or PartG is an association of non-commercial professionals, though not a corporate entity, it can sue and be sued, own property and act under the partnerships name. Another exception possible since 2012 is a Partnerschaftsgesellschaft mbB where all liabilities from professional misconduct are limited by the partnerships capital, the Partnerschaftsgesellschaft is not subject to corporate or business tax, only its partners respective income is taxed. An LLP is an equivalent to the Greek ΕΠΕ. In an ΕΠΕ the partners own personal shares that can be sold by a partner only when all other partners agree, the business management can be exercised either directly by the board of partners or by a General Manager. In the aspect of liability, an ΕΠΕ is identical to an LLP, in Hungary, LLP is equivalent to the Hungarian Betéti Társaság which must have at least two members, at least one must have unlimited liability and at least one must have limited liability. BTs have no legal personhood under Hungarian law, the Limited Liability Partnership Act 2008 was published in the official Gazette of India on 9 January 2009 and has been notified with effect from 31 March 2009. However, the Act, has been notified with limited sections only, the rules have been notified in the official gazette on 1 April 2009
19.
Societas Europaea
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A societas Europaea is a public company registered in accordance with the corporate law of the European Union, introduced in 2004 with the Council Regulation on the Statute for a European Company. Such a company may more easily transfer to, or merge with companies in, other member states. ON, Fresenius, LVMH Moët Hennessy Louis Vuitton, SAP, Schneider Electric, national law continues to supplement the basic rules in the Regulation on formation and mergers. The European Company Regulation is complemented by an Employee Involvement Directive that sets rules for participation by employees on the board of directors. There is also a statute allowing European Cooperative Societies, formation of a joint subsidiary is available under the same circumstances to any legal entities governed by public or private law. The registered office of the SE designated in the statutes must be the place where it has its central administration, the order of precedence of the laws applicable to the SE is clarified. The registration and completion of the liquidation of an SE must be disclosed for information purposes in the Official Journal of the European Communities, every SE must be registered in the State where it has its registered office, in a register designated by the law of that State. The Statutes of the SE must provide as governing bodies the general meeting of shareholders and either a management board, under the two-tier system the SE is managed by a management board. The member or members of the management board have the power to represent the company in dealings with third parties and they are appointed and removed by the supervisory board. No person may be a member of both the management board and the board of the same company at the same time. But the supervisory board may appoint one of its members to exercise the functions of a member of the management board in the event of absence through holidays, during such a period the function of the person concerned as a member of the supervisory board shall be suspended. Under the single-tier system, the SE is managed by an administrative board, the member or members of the administrative board have the power to represent the company in dealings with third parties and in legal proceedings. Under the single-tier system the board may delegate the power of management to one or more of its members. It may not be less than 5% nor more than 25%, in tax matters, the SE is treated the same as any other multinational, i. e. it is subject to the tax regime of the national legislation applicable to the company and its subsidiaries. SEs are subject to taxes and charges in all states where their administrative centres are situated. Thus, their tax status is not perfect as there is no adequate harmonization at European level. Winding-up, liquidation, insolvency, and suspension of payments are in large measure to be governed by national law, Council Regulation No 2157/2001 of 8 October 2001 on the Statute for a European company. Council Directive 2001/86/EC of 8 October 2001 supplementing the Statute for a European company with regard to the involvement of employees, see also, Europas collection of press releases, regulations, directives and FAQs on the European Company Statute. UK Statutory Instrument 2004 No.2326, the regulations are available in full text on the HMSO website
20.
Societas cooperativa Europaea
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The European Cooperative Society is, in company law, a European co-operative type of company, established in 2006 and related to the European Company. European Cooperative Societies may be established, and may operate, throughout the European Economic Area, the subscribed capital shall not be less than EUR30000. Shares issued for cash shall be paid for on the day of the subscription to not less than 25 % of their nominal value, the balance shall be paid within five years unless the statutes provide for a shorter period. So there exists difference between subscribed and paid capital, and the one should be at least paid by 25% while payment should be completed in 5 years. The SCE is based on the law of the Community and this is in accordance with an act of European secondary law. Both of them were passed into law on 22 July 2003, and the Regulation, thus, subject to the necessary national laws being passed, SCEs could be created in Member States from 18 August 2006. The SCE Regulation is currently under review in accordance with its art and this process started more than three years ago and, among other things, involved an in-depth study, two public consultations, three conferences, and a report from the EC. Catherine Cathiard, La coopérative européenne, JCP E n°1-2009
21.
Charitable incorporated organisation
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A charitable incorporated organisation is a new form of legal entity designed for non-profit organisations in the United Kingdom. These are already available to limited companies, charities can be formed as companies, in contrast, the CIO only needs to register with the Charity Commission. This is expected to reduce bureaucracy for the charity, the CIO status became available to charities in England and Wales on 4 March 2013. In Scotland, the Office of the Scottish Charity Regulator began registering Scottish Charitable Incorporated Organisations in April 2011, a Charity Commission advisory group was set up in 2000 to look at incorporation of charities, and recommended a new form of legal entity. Primary legislation to introduce the CIO as a new form of incorporation was included in the Charities Bill in 2004. It was finally enacted in the Charities Act 2006, the Charity Commission opened a consultation on draft documentation and regulations in 2008, raising a large number of difficulties and suggested improvements. The Scottish regulator began registering SCIOs in April 2011, and a fifth of new Scottish charities registered by December of that year were SCIOs, the Charity Commission in England and Wales began publishing guidance in May 2011. On 4 March 2013, for the first time, the Commission enabled an existing charity, Challenge to Change and it later reported some difficulties in transferring assets and long-term grant agreements to the new legal entity and subsequently closed due to reduced levels of funding. Another charity converted but then reverted to its old status because of the cost, Charity types, how to choose a structure, Government guidance for England and Wales Guidance from the Scottish Charity Regulator on setting up a SCIO in Scotland
22.
Community interest company
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CICs are intended to be easy to set up, with all the flexibility and certainty of the company form, but with some special features to ensure they are working for the benefit of the community. They have proved popular and some 10,000 registered in the statuss first 10 years, CICs tackle a wide range of social and environmental issues and operate in all parts of the economy. By using business solutions to public good, it is believed that CICs have a distinct and valuable role to play in helping create a strong, sustainable. They include social and community enterprises, social firms, mutual organisations such as co-operatives, CICs must be limited companies of one form or another. A CIC cannot be a charity, an IPS or an unincorporated organisation, regular limited liability companies that do not have charitable status find it difficult to ensure that their assets are dedicated to public benefit. There is no simple, clear way of locking assets of such a company to a public benefit purpose other than applying for charitable status, the community interest company is intended to meet this need. When a CIC is requested, the CIC regulator considers whether applications meet the criteria to become a CIC, if satisfied, the regulator advises the registrar in Companies House who, provided that all the documents are in order, will issue a certificate of incorporation as a CIC. A charity can convert to a CIC with the consent of the Charity Commission, in so doing it will lose its charitable status including tax advantages. A charity may own a CIC, in case the CIC would be permitted to pass assets to the charity. CICs are more lightly regulated than charities but do not have the benefit of charitable status and those who may want to set up a CIC are expected to be philanthropic entrepreneurs who want to do good in a form other than charity. This may be because, CICs are specifically identified with social enterprise, some organisations may feel that this is more suitable than charitable status. Members of the board of a charity may only be paid where the constitution contains such a power and this limitation does not apply to CICs. The definition of community interest that applies to CICs is wider than the public interest test for charity, the formation and registration is similar to that of any limited company
23.
Industrial and provident society
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An industrial and provident society was a legal entity for a trading business or voluntary organisation in the United Kingdom, the Republic of Ireland, and New Zealand. The name is used in New Zealand, the Republic of Ireland. Recent legal developments in Great Britain include the Co-operative and Community Benefit Societies Act 2014, from 1 August 2014 a new society has had to register as either a co-operative or a community benefit society rather than, as was the case previously, a society that meets either requirement. However, for administrative purposes the three types of society are categorised separately, the Act applies to Great Britain but not Northern Ireland. See Co-operative and Community Benefit Societies Act 2014 for information about the current law on these societies, in 1965, an act of Parliament came into effect called the Industrial and Provident Societies Act 1965. In 2006, the Friendly and Industrial and Provident Societies Act 1968 Order 2006 increased the exemption threshold level for industrial. Also the Charities Act 2006 removed certain exemptions of charitable IPSs in England, from that point, charitable IPSs had to register with both the FCA and the Charity Commission, except registered social landlords, who register with the Tenant Services Authority. Since 2010 the IPS laws explicitly name co-operatives in their titles, the Industrial and Provident Societies Act 1965 was renamed Co-operative and Community Benefit Societies and Credit Unions Act 1965. In January 2012, the UK Prime Minister, David Cameron announced a project to all the legislation applicable to industrial. There was some uncertainty as to how far new developments would address the problems with the legislation, Cameron stated, We know that breaking monopolies, encouraging choice, opening up new forms of enterprise is not just right for business but the best way of improving public services too. Ed Mayo, Secretary General of Co-operatives UK, welcomed the project, in mid-2012, revision of laws for co-operative was in its early stages. Some felt the reforms did not deal with certain key problems, the registration function for societies was transferred to the FCA while the prudential regulation of credit unions was transferred to the PRA. In September 2013, the English and Scottish Law Commissions published a draft consolidation bill, draft regulations linked to that consultation were also available, having been circulated to a small number of people. Those drafts and other materials, including a members bill to liberalise the use of share capital by societies presented to the UK House of Lords were explained. In 2014, the Co-operative and Community Benefit Societies Act 2014 was given royal assent, IPSs were registered by the Financial Conduct Authority, which took over the job from the Registrar of Friendly Societies when it was part of the Financial Services Authority. Note that IPS registration is quite separate from the FCAs function of regulating financial institutions, the legislation in the Republic of Ireland is based on modifications of the UK Industrial and Provident Societies Act 1893. However, in a not-for-profit IPS the share capital may be limited to a nominal amount, rather they are par-value shares, which can only be redeemed at face value. The profits and losses of an IPS are thus the property of the members
24.
Private company limited by guarantee
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In British and Irish company law, a company limited by guarantee is an alternative type of corporation used primarily for non-profit organisations that require legal personality. A company limited by guarantee does not usually have a capital or shareholders. The guarantors give an undertaking to contribute an amount in the event of the winding up of the company. A company limited by guarantee can distribute its profits to its members, if allowed to by its articles of association, Limited companies can convert to a Community Interest Company which feature an asset lock which prevents the extraction of profits. Like a private company limited by shares, a limited by guarantee must include the suffix Limited in its name. One condition of this exclusion is that the company does not distribute profits, until 1981, it was possible in the United Kingdom to form a company limited by guarantee with share capital. Under section 5 of the Companies Act 2006, new companies cannot be formed as a limited by guarantee with a share capital. The railway infrastructure provider Network Rail, domain name registry Nominet UK, England and Wales Cricket Board and IXPs LINX, Australia also has companies limited by guarantee, Cricket Australia being one example. Community interest company Company Private limited company by shares Companies Act 2006, Office of Public Sector Information
25.
Private company limited by shares
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A private company limited by shares is a class of private limited company incorporated under the laws of England and Wales, Scotland, certain Commonwealth countries or the Republic of Ireland. It has shareholders with limited liability and its shares may not be offered to the general public, a shareholders personal assets are thus protected in the event of the companys insolvency, but any money invested in the company may be lost. A limited company may be private or public, a private limited companys disclosure requirements are lighter, but its shares may not be offered to the general public and therefore cannot be traded on a public stock exchange. This is the difference between a private limited company and a public limited company. Most companies, particularly small companies, are private, private companies limited by shares are usually required to have the suffix Limited or Incorporated as part of their name, though the latter cannot be used in the UK or the Republic of Ireland. In the Republic of Ireland Teoranta may be used instead, largely by Gaeltacht companies, cyfyngedig may be used by Welsh companies in a similar fashion. In the United Kingdom, every company must have formally appointed company officers, by statute, a private company must have at least one director and until April 2008 also had to have a secretary. The companys articles of association may require more than one director, at least one director must be an individual, not another company. Anybody can be a director, subject to certain exceptions, a person who is yet to be discharged from bankruptcy or who has been banned from being a company director by the court will be prohibited, except in certain cases. In addition, a person may not be a director of a company if he or she is unable to consent to their appointment. As of October 2008, the age required to give this consent is 16 years of age. This change was applied retroactively, with any directors under the age of 16 being removed from the register upon the implementation of the and this was already the case in Scotland, under the Age of Legal Capacity Act 1991. No formal qualifications are required to be a director or secretary. When a limited company is formed it must issue one or more subscriber shares to its initial members and it may increase capitalisation by issue of further shares. The issued share capital of the company is the number of shares existing in the company multiplied by the nominal value of each share. A company incorporated in England and Wales can be created with any number of shares of any nominal value, for example, there may be 10,000 shares with a nominal value of 1p, or 100 shares of £1 each. In each case the capital would be £100. Unissued shares can be issued at any time by the using a Form SH01 - Return of Allotment of Shares subject to prior authorisation by the shareholders
26.
Proprietary company
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A proprietary company is a form of privately held company in Australia and South Africa that is either limited or unlimited. However, unlike a public company there are, depending on jurisdiction, restrictions on what it can, in Australia, a proprietary company is defined under section 45A of the Corporations Act 2001. The Act puts certain restrictions on companies such as not permitting them to have more than 50 members. Another important restriction relates to fundraising, a proprietary company must not engage in fundraising that would require a disclosure document such as a prospectus, an offer information statement, or a profile statement to be issued. The Act states in which circumstances a company must issue a prospectus when attempting to raise funds and this means that a proprietary company must not offer its shares to the public. Section 45A of the Act also distinguishes proprietary companies as either large proprietary or small proprietary, the differences here relate to issues such as operating revenue, consolidated gross assets, and the number of employed persons. Large proprietary companies are required to appoint an auditor and lodge appropriate financial statements with the Australian Securities and Investments Commission. Under Australian law, a limited company is a business structure that has at least one shareholder and up to 50. Its counterparts include the limited company and the Unlimited Proprietary company with a share capital. The proprietary limited or unlimited company must have at least one shareholder, no more than 50 non-employee shareholders, a secretary can be appointed, that must be at least 18 years of age. One person may hold the positions of company director and secretary. Proprietary limited companies are classified as large or small. A proprietary company is classified as small if it meets at least two of the following criteria, It has assets of less than $12.5 million at the end of a financial year. It has less than 50 employees at the end of a financial year and it has a gross operating revenue of less than $25 million for the financial year. Most large proprietary companies have to lodge audited accounts, Proprietary companies have the word Proprietary in their name, thus Relays Proprietary Limited, abbreviated to Relays Pty Ltd or Relays P/L. In Singapore, a company name would be named Relays Limited abbreviated to Relays Pte Ltd. In South Africa, the name of a private company ends with Ltd, to help identify companies more uniquely and concisely, many countries have a company number which does not change if the company changes its name. Australian Company Number Australian company law South African company law
27.
Public limited company
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A public limited company is a type of public company under the United Kingdom company law, some Commonwealth jurisdictions, and the Republic of Ireland. It is a liability company whose shares may be freely sold and traded to the public, with a minimum share capital of £50,000. Similar companies in the United States are called publicly traded companies, public limited companies will also have a separate legal identity. A PLC can be either an unlisted or listed company on the stock exchanges, in the United Kingdom, a public limited company usually must include the words public limited company or the abbreviation PLC or plc at the end and as part of the legal company name. Welsh companies may choose to end their names with ccc. However, some public limited companies incorporated under special legislation are exempted from bearing any of the identifying suffixes. The term public limited company and the PLC/plc suffix were introduced in 1981, prior to this, all limited companies bore the suffix Limited, which is still used by private limited companies. When a new company incorporates in England and Wales or in Scotland, it must register with Companies House, Formation of a public limited company requires a minimum of one director and one secretary. In England and Wales and in Scotland, the male/female is under 16 years old, some people who are not British citizens are restricted as to what work they may do while in the UK, which may exclude them from being a director. The members must agree to some, or all, of the shares when the company is registered. The memorandum of association must show the names of the people who have agreed to take shares and these people are called the subscribers. There is a share capital for public limited companies, Before it can start business. A quarter of them, £12,500, must be paid up, each allotted share must be paid up to at least one quarter of its nominal value together with the whole of any premium. A company can increase its share capital by passing an ordinary resolution. A copy of the resolution – and notice of the increase on Form 123 – must reach Companies House within 15 days of being passed, no fee is payable to Companies House. A company can decrease its authorised share capital by passing a resolution to cancel shares which have not been taken or agreed to be taken by any person. Notice of the cancellation, on Form 122, must reach Companies House within one month, no fee is payable to Companies House. A company may have as different types of shares as it wishes
28.
Series LLC
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In overall structure, the series LLC has been described as a master LLC that has separate divisions, which is similar to an S corporation with Q-subs. The concept of the series LLC was first introduced to help the mutual fund industry avoid filing multiple SEC filings for different classes of funds. Instead the idea was to use one entity for all funds so that the SEC filing would be under one umbrella, the concept is similar to that of the segregated portfolio company or protected cell company, concepts which existed prior to the invention of the series LLC. Segregated portfolio companies exist in such as Guernsey, the British Virgin Islands, Bermuda, the Cayman Islands, Mauritius. This method of liability segregation was first called the Delaware Series LLC because the first state to enact legislation was Delaware. As of April 2005, Iowa and Oklahoma already had passed similar acts, later in 2005, Illinois and Nevada followed. Tennessee and Utah passed legislation effective in 2006, Wisconsin passed a stripped-down version of the series LLC legislation. Montana enacted Series LLC legislation in 2011, since becoming a popular structure for captive insurance companies. The utility of a Series LLC may be explained by a comparison to the alternative, many form an LLC in order to protect personal assets from a legal claim relating to their real estate investment or business liabilities. Additional liability protection may be gained by forming and maintaining a separate LLC to hold each property or business entity. However, there are costs and administrative burdens associated with properly forming, qualifying and maintaining each separate LLC, another option may be to form multiple series or cells if permitted under applicable laws. In several jurisdictions, the procedure for adding and deleting series is uncomplicated, additional series can be formed or dissolved without any public filing by simply amending the Series limited liability company agreement. Under Delaware law, any particular series may be dissolved by 2/3 approval of the ownership interests, some jurisdictions, notably Illinois, do have a mechanism for public publication of series. Additionally Illinois states that each series is an entity, whereas Delaware is silent on whether each series is a separate entity. Most states with the series LLC have followed the Delaware model, until recently, Delaware did not clearly state that each series could sue, enter into contracts, etc. on its own, without the entire company being named in the lawsuit. Delaware clarified its legislation that a series can now enter into contracts, hold title to assets, grant liens and security interests, in several other respects, series are not treated by Delaware as separate entities. For example, series are not separately registered and they cannot merge or consolidate with other entities, Illinois has restricted the rights given to the members of a series LLC to create new series because Illinois requires public filing. This has removed some of the cost savings of a series LLC, there is uncertainty as to whether the liability shield between LLC series is fully effective in states that do not have series LLC laws
29.
S corporation
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An S corporation, for United States federal income tax purposes, is a closely held corporation that makes a valid election to be taxed under Subchapter S of Chapter 1 of the Internal Revenue Code. In general, S corporations do not pay any federal income taxes, instead, the corporations income or losses are divided among and passed through to its shareholders. The shareholders must then report the income or loss on their own income tax returns. S corporations are ordinary business corporations that elect to pass corporate income, losses, deductions, the S corporation rules are contained in Subchapter S of Chapter 1 of the Internal Revenue Code. Congress, acting on the Department of Treasurys suggestion of 1946, S status combines the legal environment of C corporations with U. S. federal income taxation similar to that of partnerships. Like a C corporation, an S corporation is generally a corporation under the law of the state in which the entity is organized, therefore, taxation of S corporations resembles that of partnerships. As with partnerships, the income, deductions, and tax credits of an S corporation flow through to shareholders annually, thus, income is taxed at the shareholder level and not at the corporate level. Payments to S shareholders by the corporation are distributed tax-free to the extent that the earnings were previously taxed. Unlike a C corporation, an S corporation is not eligible for a dividends received deduction, unlike a C corporation, an S corporation is not subject to the 10 percent of taxable income limitation applicable to charitable contribution deductions. The term S corporation means a business corporation which has made an election under §1362 to be taxed as an S corporation. A corporation is eligible if it, Has no more than 100 shareholders, Has shareholders who are all individuals Has no nonresident aliens as shareholders, a limited liability company is eligible to be taxed as an S corporation under the check-the-box regulations at §301. 7701-2. The LLC first elects to be taxed as a corporation, at which point it becomes a corporation for tax purposes, spouses are automatically treated as a single shareholder. Shareholders must be U. S. citizens or residents, and must be persons, so corporations. However, certain trusts, estates, and tax-exempt corporations, notably 501 corporations, are permitted to be shareholders, an S corporation may only have one class of stock. Differences in voting rights are disregarded, which means that an S corporation may have voting and nonvoting stock, the Form 2553 must be signed by all of the corporations shareholders. If a shareholder resides in a community property state, the shareholders spouse generally must also sign the 2553, congress has directed the IRS to show leniency with regard to late S elections. Accordingly, often, the IRS will accept a late S election, some states such as New York and New Jersey require a separate state-level S election in order for the corporation to be treated, for state tax purposes, as an S corporation. If a corporation that has elected to be treated as an S corporation ceases to meet the requirements, an S corporations election will also terminate if, for each of three consecutive years, its passive investment income exceeds 25% of gross receipts and it has accumulated earnings and profits
30.
Delaware General Corporation Law
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The Delaware General Corporation Law is the statute governing corporate law in the U. S. state of Delaware. It has been the most important jurisdiction in United States corporate law since the early 20th century, over 50% of publicly traded corporations in the United States and 60% of the Fortune 500 are incorporated in the state. Delaware acquired its status as a haven in the early 20th century. The group that pushed for legislation intended to establish a corporation that would sell services to other businesses incorporating in Delaware. Before the rise of general incorporation acts, forming a corporation required an act of the state legislature. General incorporation allowed anyone to form a corporation by simply raising money, §102 shareholders are not liable for corporate debts. §106 A corporation is considered to be in existence after its certificate of incorporation is filed with the secretary of state, §109 shareholders have the right to change the bylaws. §126 Corporations cannot act as banks, §132 Every corporation must maintain a registered agent in the state. So there is a requirement for a board of directors or a comparable organ, §141 the boards quorum for director meetings cannot be under one-third. §141 committees of the board cannot be given authority to amend the certificate of incorporation, merge, or recommend dissolution or sale to shareholders, if the board is classified, then directors cannot be removed unless there is gross misconduct. §202, restrictions on transferability of stock cannot be imposed on shares previously issued without the shareholders consent, §211, there must be an annual meeting of shareholders for election of directors and shareholder meetings can only be called if the constitution allows for it. §216, the quorum for shareholder meetings cannot be less than one-third of those entitled to vote, §218, a voting trust cannot last longer than ten years. §219, shareholders have the right to inspect the register within ten days of a meeting. §220, right to inspect corporations books and record for a purpose at any time. §226, right of the court to appoint one or more persons to be custodians, §242 any constitutional amendment requires a resolution by the directors, and then a majority vote of shareholders, and the affected classes. §271, sale of all the corporation requires majority shareholder approval. §275, dissolution of the corporation requires majority shareholder approval, §262, shareholders dissenting from a merger have the right to be bought out at a fair value. §327, shareholders have the right to a claim for a breach of duties of care or loyalty
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Delaware statutory trust
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A Delaware statutory trust is a legally recognized trust that is set up for the purpose of business, but not necessarily in the U. S. state of Delaware. It may also be referred to as an Unincorporated Business Trust or UBO, each owner receives their percentage share of the cash flow income, tax benefits, and appreciation, if any, of the entire property. The DST ownership option essentially offers the benefits and risks that an investor would receive as a single large-scale investment property owner. Each DST property asset is managed by professional investment real estate asset managers, DST Investments are located throughout the United States. The concept for business trusts, especially those that involve the holding of property, in Delaware, it was not until 1947 that Common Law began recognizing statutory trusts. No legal recognition of statutory trusts existed until the passage of the Delaware Statutory Trust Act,12 Del. C.3801 et. Under The Act, developed on the premise of trust law, statutory trusts were now recognized as their own entity, separate from their trustee. Massachusetts, another state that has trust law, refers to its legal entity as a Massachusetts business trust, most states, however, still rely on Common Law to oversee the trusts within their jurisdiction. The formation of a Delaware statutory trust is relatively simple and inexpensive, to form a statutory trust, a private trust agreement must be developed by all involved parties to ensure that individual interests are protected. The private trust agreement need not be shown to any official of the State, once the agreement is completed, a Certificate of Trust can be obtained from the Delaware Division of Corporations and completed. The signatures of the involved are then required, followed by submission of the forms to the Division of Corporations. If the statutory trust is, or will become, an investment company, it must maintain a registered agent. On August 16,2004, Internal Revenue Bulletin 2004-33 was published in reference to Rev. Rul. 2004-86, ay a taxpayer exchange real property for an interest in a Delaware statutory trust without recognition of gain or loss under §1031 of the Internal Revenue Code. These holdings of the government offered a clearer notion that Delaware statutory trusts are legal entities, separate from their trustee. In addition, Delaware statutory trusts were shown to be considered a trust for federal tax purposes, making them a pass through entity that mitigates taxation for their trustee. The trustee cannot renegotiate the terms of the loans and cannot borrow any new funds from any party. The trustee cannot reinvest the proceeds from the sale of its real estate, the trustee is limited to making capital expenditures with respect to the property for normal repair and maintenance, minor nonstructural capital improvements, and those required by law. Any reserves or cash held between distribution dates can only be invested in short-term debt obligations, all cash, other than necessary reserves, must be distributed on a current basis
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Massachusetts business trust
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A Massachusetts Business Trust is a legal trust set up for the purposes of business, but not necessarily one that is operated in the Commonwealth of Massachusetts. They may also be referred to as a business organization or UBO. Business trusts may be established under the laws of other U. S. states, many businesses are formed as MBTs to mitigate taxation, mutual funds in the U. S. are often structured as MBTs, though sometimes they are organized as Maryland corporations. More recently, a Delaware statutory trust or DST has become a form of organization. Since mutual funds are investment companies and not operating companies, many traditional corporation rules, during much of the 20th century the tax laws and state regulations strongly favored corporate structures. Tightening laws near the end of the resulted in the resurgence of the use of the UBO. For example, in 1985 the Scudder Capital Growth Fund, Inc. and Kemper Money Market Fund, the business trust made its debut in Massachusetts in 1827. As a result, a U. S. business trust today is called a Massachusetts trust in legal circles. It states on page 1681 of Blacks Law Dictionary 4Ed,1957, under the term Massachusetts or Business Trust, See Trust Estate as Business Company. This particular definition is found on page 1684 and it states this, the trustees are elected by the shareholders, or in case of a vacancy, by the board of trustees. Provision is made in the agreement and declaration of the trust to the effect that when new trustees are elected, the declaration of the trust specifies the power of the trustees. The trustees may also hold shares as beneficiaries, provision may be made for the alteration or specified manner. In Eliot v. Freeman,31 Sup, ct.360,220 U. S.178,55 L. Ed. If the grantor maintains control of the trust, then grantor trust rules will apply, otherwise, the trust would be treated as a simple or complex trust, depending on the trust instrument. Some trusts may alternate between simple and complex under certain conditions, many but not all trust organizations do their own tax work. This can be highly specialized work, all simple and complex trusts are irrevocable and in both cases any capital gains realized in the portfolios are taxed to the trust corpus or principal. Mutual fund Real estate Investment Trust Trust
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Nevada corporation
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A Nevada corporation is a corporation incorporated under Chapter 78 of the Nevada Revised Statutes of the U. S. state of Nevada. It is significant in United States corporate law, Nevada, like Delaware, is well known as a state that offers a corporate haven. Many major corporations are incorporated in Nevada, particularly corporations whose headquarters are located in California, Nevada law provides extremely strong protection against piercing the corporate veil, where a corporations owners can be held responsible for the actions of a corporation. Nevadas laws offer flexibility to a board of directors in managing the affairs of a corporation, nevadas tax structure is also a large benefit to incorporation in Nevada. It also has no income tax or personal income tax. Nevada additionally applies a 1. 17% tax on wages to most businesses with a payroll over $62,500. Nevada also imposes a Commerce Tax on businesses with Nevada gross revenue exceeding $4,000,000 within a taxable year, Nevada and Texas are the only two states that do not have information sharing agreements with the Internal Revenue Service. In the United States, corporations are generally organized pursuant to state law, moreover, a business need not establish or maintain a physical presence in a state in order to incorporate under the states general corporation law. If the corporation transacts business in a other than the state of incorporation. For example, a business may be headquartered in San Jose, California, the corporation is a Nevada corporation and the State of California will consider it to be a foreign corporation. See California Corporations Code Section 171, in the United States, states generally, but not invariably, follow the internal affairs doctrine. The internal affairs doctrine is a conflict of principle which recognizes that only one State should have the authority to regulate a corporations internal affairs. Because otherwise a corporation could be faced with conflicting demands, under the internal affairs doctrine, courts will generally apply the law of the state of incorporation to the internal affairs of the corporation. States can derive revenues through the incorporation of businesses and these revenues include direct payments to the state in the form of filing and other fees. The state can also receive revenues indirectly through businesses to corporations, the Nevada legislature has tried to make Nevada an attractive alternative to Delaware as a state for incorporation. In many instances, it has tried to out Delaware Delaware, because of the large number of corporations chartered in Nevada, the courts in that state are more focused on the application of corporate law than the courts of most other states
