For public companies, they also have to obtain a tradingcertificatebefore they could start business. This certificate confirms that the company has the requisite minimum capital. 19.6 THE COMPANY PROMOTERA company cannot conceive or register itself; there would usually be somebody who gets the idea to start a company, undertakes its registration, and submits the necessary application and documents to the Registrar of companies. Such a person would be the promoter of the company. According to Cockburn J. in Twycrossv.Grant  2 CPD 469 at 541, a promoter as someone who “undertakes to form a company with reference to a given project and to set it going, and who takes the necessary steps to accomplish that purpose.” A promoter may (and often does) become a shareholder or director of the company.Promoters, like directors of a company are fiduciaries. This means that they must act in good faith and in the best interest of the company. They must not make secret profits from their position and must account for any such profits made. Any contract between a promoter and the company are pre-incorporation contracts and could be made void by the company unless a full disclosure is made and an independent board of directors or all the original members approve the contract. A company may sue its promoter for restitution and damages in respect of monies received or wrongs done against the company.Download free eBooks at bookboon.com
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BUSINESS ORGANISATIONS AND AGENCYCOMPANIES36119.7 CLASSIFICATION OF COMPANIESAn incorporated company may be classified in various ways even though all of them share the attributes of incorporation. The main classifications are as follows.19.7.1 LIMITED AND UNLIMITED COMPANIESUnder s 3 CA 2006, a company may be registered as limited or unlimited, although only a few choose the unlimited option. An unlimited company is a legal entity but the liability of its members is not limited, meaning that they could be personally liable for the debts of the company if it is unable to pay it from its assets. However, the members would not be liable directly to the company’s creditors. If the company were to be wound up, the liability of its members would be to contribute money to the company for the payment of its debts. The main reason for establishing an unlimited company is that such a company is not required to deliver annual accounts and reports to the Registrar of Companies. A limited company, on the other hand is a company the liability of whose members to contribute to its debts on liquidation is not absolute but restricted to the unpaid value of their shares or guarantee.Download free eBooks at bookboon.comClick on the ad to read more95,000 kmIn the past 5 years we have drilled around—that’s more than twicearound the world.
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