Topic-1-Supplementary-notes-on-Corporate-Law-FLSBupdated-1

Topic-1-Supplementary-notes-on-Corporate-Law-FLSBupdated-1...

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Topic 1 Functions of Law in Society and Business —Topic 1— Supplementary notes on Corporate Law Types of Business Organizations 1. Unincorporated organizations 2. Incorporated organizations Unincorporated Sole trader & Partnership Incorporated Private/ Public Legal status No SLT - Can sue the sole trader’s directly (not include wife’s personal assets) - Separate legal entity - Co can enter into contract - It can sue and be sued No of members Partnership: two or more persons with a view to profit. - 2 to 20 except as regulated by professional association like HKICPA eg. PWC, KPMG Private: 1-50 Public: No restrictions Liabilities Unlimited liability except limited partnership Limited Liability 1. The liability is limited to the amount unpaid on the shares ( as long as you have fully paid the 1
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Topic 1 shares, you will have no further liability ) = investment level - Shareholders 2. Limited by guarantee : Charitable organization agreed amount ( No charity will liquidate in HK, no need to inject any capital as the members of charity) - The problem of liability will only arise when the company liquidates (Not an on-going process) Succession 1. No P.S. (If a sole trader die, his business will end) Partnership 2. Partnership Agreement No. PS unless as provided in the partnership agreement Continuity Clause Perpetual succession Raise of capital 1. Share Capital 2
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Topic 1 - Public issues for general public + right issue + private issue - Private : issue shares to existing shareholders (Right Issue) - Private issue: individual investors (Cannot issue prospectus to the general public) 2. Loan Capital - Fixed charge/ collateral over the office building (Not allow to sell the collateral to the third party): deposit all the title deeds to the bank and the bank will not release the doc. to you until 3
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