Carlimbo Commercial Transaction

Carlimbo Commercial Transaction - Companies The definition...

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Companies The definition of the word company is found in Section 2(1) of the Companies Act Cap 486 Laws of Kenya. A company in the Act means 'a company formed and registered under this Act or an existing company. The definition is vague thus its legal attribute will depend upon a particular legal system. A company can thus be defined as an association of several persons who contribute money or money’s worth into a common stock and who employ it for some common purpose. Associations are mainly of three types; 1. Companies, 2. Partnerships and 3. Cooperative societies. Company law consists of common law and equity rules embodied in cases and statutory rules found in the Companies Act Cap 486 Laws of Kenya. Companies have 3 fundamental concepts; 1. The concept of Legal/ Corporate personality by which a company is treated in law as a separate entity from the members, 2. The Capacity to create legal binding relations and 3. The concept of limited liability. Liability means the extent to which a legal person/ person can be held accountable by law. In this concept, one is held to be liable only to a certain limit and not beyond it. Legal Personality , means having certain legal rights and duties which can be enforced by the courts. Corporations, like human beings, also have legal personality. A corporation is an artificial person created and treated by law as a person in its own right, and is independent from the individual members who compose it. Corporate personality thus encompasses the capacity of a corporation to have a name of its own, to sue and be sued, and to have the right to purchase, sell, lease, and mortgage its property in its own name. In addition, property cannot be taken away from a corporation without due process of the law. Companies have the legal capacity to create binding legal relations as well as to engage in legal processes. Companies are recognized by law as Mayende N. Syphurine Page 1
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separate legal entities from the natural persons who form it by virtue of their formal registration in accordance with the law under which they are created. Institutions that enjoy corporate personality include; 1. Companies registered under the Companies Act (Cap 486). 2. Statutory corporations established by Acts of Parliament. 3. Chartered companies. Institutions which advance group interest of a social rather than commercial nature, like clubs, societies, guilds and non-governmental organizations lack legal personality as they lack the status of a body corporate though they are registered and regulated by statute. In such institutions, liability vests in actual officers who act on behalf of members or who have been given express authority by members to carry out certain acts. The institutions cannot be held liable for contractual debts and obligations incurred by officers on their behalf whether or not they purport to act for and on behalf of their members.
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  • Summer '15
  • LINCOLNOONGE
  • Law, The Hours, Corporation, Types of companies, managing director, British Company, Mayende N. Syphurine

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