Topic 1a -Corporate Law-Formation of company.ppt

Topic 1a -Corporate Law-Formation of company.ppt -...

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106/10/31 1 Functions of Law in Society and Functions of Law in Society and Business--Topic 1-Corporate Law Business--Topic 1-Corporate Law WELCOME
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106/10/31 2 Contact details Contact details Charles Lam Solicitor of the High Court of Hong Kong Room 6004 (LSK), Department of Accounting, HKUST Business School Emails: [email protected]
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106/10/31 3 Content Content Types of business organization Incorporation formalities of a company
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106/10/31 4 Types of Business Types of Business Organizations Organizations Unincorporated Incorporated (the requirements for registering a company are: 1) one or more persons and 2) associated for a lawful purpose) (Note that the word “ person ” includes both individuals and legal persons. A company is a legal person. This means that a company may be formed by one or more individuals or by one or more companies or by a combination of individuals and companies) For example, it is convenient to buy land property by way of a company. Differences between these two Meaning of separate legal entity, perpetual succession
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Incorporated Vs Incorporated Vs Unincorporated organizations Unincorporated organizations Legal status– Separate legal entity? Number of members– For company: how many members? Partnership: two or more persons with a view to profit. Liabilities– Limited liabilities (by shares or by guarantee) For unincorporated: Unlimited liability except limited partnership Succession- Perpetual succession? 106/10/31 5
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Incorporated Vs Incorporated Vs Unincorporated organizations Unincorporated organizations Raise of capital- share capital Vs loan capital Ownership of properties-Who is the owner of the company’s properties Formation procedures 106/10/31 6
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Factors to be considered in Factors to be considered in forming a business forming a business organization organization Nature of business (Availability of choice is limited by the nature of business e.g. law firm and accounting firm) Amount of capital required (e.g. loan capital by way of right issue, private placing and public placing) Number of members Relationship among the members Tax considerations (Not a major factor as the tax rate is already very low in Hong Kong)
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