F4 REVISION SESSIONS

MAIN TOPICS: COMPANY LEGAL ENTITY AND FORMATION AND FRAUDULENT BEHAVIOUR

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Paper F4

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[16:31:09] sajjadchangezi: {brugal84} yeh and it also covers about 40% of the syllabus
[16:31:09] sunny20: {mikelittle} Sorry Bonus Issue
[16:31:09]

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Paper F4

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[16:31:09] [You are already in this room.]
[16:31:10] mikelittle: However, the directors, if they have any sense at all, and if there is enough balance in the share premium account, will finance the “issue of fully paid bonus shares” out of share premium
[16:31:14] danielglover: {sunny20} You want to be an accountant?
[16:31:22] SKHALID: 😮 who’s taken over my class?
[16:31:35] gutsychyk: so option is when u keep offer open for money, unilateral is when one party has started his part of consideration, whts collateral ?
[16:31:36] mikelittle: {sunny20} Yes, it’s one of only 4 allowable uses
[16:31:36] brugal84: (sajjadchangezi) no shortcuts!
[16:31:38] sunny20: {danielglover} Yes I do!
[16:31:49] eJeee: {SKHALID} its the tutor 😀
[16:32:03] SKHALID: {eJeee} hmmmm….
[16:32:18] SKHALID: {mikelittle} i didnt know you mod the F4 class?????????
[16:32:31] mikelittle: {gutsychyk} Shanklin Pier v Detel Products is a great example of a collateral contract
[16:32:36] eJeee: {SKHALID} we will carry on after mike
[16:32:53] SKHALID: {eJeee} hmmm, wot type does this finish|
[16:32:56] SKHALID: time*
[16:33:07] eJeee: {SKHALID} 30 minutes to go i guess 😀
[16:33:08] mikelittle: {SKHALID} Sorry – I’m just an amateur who happened to be passing
[16:33:33] sunny20: {mikelittle} What are 4 allowable?
[16:33:39] SKHALID: {mikelittle} hmmm ok well i will let you finish
[16:33:41] gutsychyk: {mikelittle} another thing, in bpp there are some different cases and in kaplan different, may be in kaplan there r less no. of cases, if i quote cases from kaplan would tht be okay? coz when i do bpp kit after studying from kaplan, i m like i dont know wht these cases r
[16:34:25] SKHALID: after Mike finishes I will do Formation and legal personality of company and if we get time, fraudulent behaviour
[16:34:31] danielglover: where does the privy council fit in the hierachy of courts?
[16:34:40] brugal84: (gutsychyk) as long as u use the right case in the right place it doesn’t matter which case u use
[16:34:41] eJeee: If mike didnt go even after 30 minutes.. then WE ALL ( Members ) by Odinary resolution 😀 will do it
[16:34:46] sunny20: {mikelittle} What are 4 allowable uses for bonus issue?
[16:34:48] mikelittle: {sunny20} as well as bonus issues, write of preliminary and formation expenses, provise for the premium payable on redemption of shares or debentures, and write of the expenses of, discounts allowed on, and commissions paid on any issue of shares or debentures
[16:34:51] lquach: in BPP text book, they mention repudiatory breach of contract, what the difference between repudiatory and anticipatory pls
[16:35:00] mikelittle: But of course, you cannot issue shares at a discount
[16:35:06] SKHALID: {eJeee} lol
[16:35:15] mominacca: the lecture is reapeated twice does it have any difference from the first one
[16:35:21] mikelittle: {SKHALID} thanks
[16:35:24] sajjadchangezi: {SKHALID} hmm fine … i’ll try to be at that time
[16:35:38] SKHALID: {sajjadchangezi} 😉
[16:35:46] SKHALID: {mikelittle} no prob :d
[16:36:03] mikelittle: {gutsychyk} cases are cases – there are many in BPP I don’t use ( I’ve not seen the Kaplan text ) but an illustrative case is just that – it’s an illustrative case
[16:36:45] mikelittle: {danielglover} It’s a rarely used mechanism for the Queen to pass law without it going through the process of green paper, white pa…..
[16:37:18] sunny20: {mikelittle} Should I memorize these cases?
[16:37:30] danielglover: bit like a dictatorship
[16:37:42] mikelittle: {eJeee} Whoooah! removed from office? I need special notice and the chance to write my written representatuions of reasonable length and not more that 1000 words
[16:37:45] SKHALID: by the way you can use any case you know which are relevant to the topic, although text books should have appendix of cases to use
[16:38:06] mikelittle: {lquach} repudiate means that you can deny
[16:38:36] ladyjudge: when do we mention cases and when do we not?
[16:38:38] mikelittle: anticipatory means you give notice BEFGORE the due date for the contarct to start that it is your intention not to honour the contract
[16:38:52] mikelittle: {mominacca} What?
[16:39:12] SKHALID: my class notes has over 64 cases 😀
[16:39:17] hizzam1: {mikelittle} how does LLP come to an end ??
[16:39:28] gutsychyk: repudiate = actual breach right, at the time of discharge of dutiies? anticipatory before the time of discharge of duty
[16:39:37] mikelittle: {sunny20} That’s a dream many of you want to achieve – or is it a nightmare?
[16:39:39] sunny20: {mikelittle} I have failed twice F4. What is the best way to pass F4?
[16:39:55] SKHALID: but i only memorise 3 cases per chapter or 5 where its a long one
[16:40:00] mikelittle: {danielglover} yes, I suppose
[16:40:05] danielglover: {sunny20} get your answers correct
[16:40:10] SKHALID: {danielglover} lol
[16:40:24] mikelittle: {ladyjudge} when they’re relevant to the point of law you’ve just written in your answer
[16:40:36] SKHALID: {sunny20} best thing is to make sure you are good with all the always examined areas
[16:40:42] mikelittle: {SKHALID} My lectures have way, way over 100
[16:40:52] mikelittle: {hizzam1} with a “P”
[16:41:09] sunny20: {danielglover} How do I know the examined areas?
[16:41:21] mikelittle: {sunny20} read the exam technique article on this site
[16:41:21] brugal84: what r the diifferences between company and llp?
[16:41:21] sajjadchangezi: lol 😀
[16:41:32] SKHALID: {mikelittle} thats too many 😀 m not gonna memo those all :p
[16:41:38] mikelittle: {danielglover} 🙂
[16:42:06] mikelittle: {sunny20} Not sure I understand that question
[16:42:21] sajjadchangezi: {brugal84} the only thing i know the difference among them is the spelling diff. 😀
[16:42:28] SKHALID: {sajjadchangezi} lol
[16:42:30] mikelittle: {brugal84} one’s a company and the other is a partnership
[16:42:37] sajjadchangezi: 😀
[16:42:43] mikelittle: {SKHALID} Ok
[16:42:54] brugal84: thot this was meant to be helpful!
[16:42:59] hizzam1: {mikelittle} 😛 LLP is a legal entity in its own right but it has 1 member unlimited liability ..
[16:43:00] SKHALID: {brugal84} well they are the same its just level of legal regulation is less strict
[16:43:01] hizzam1: ‘??
[16:43:29] gutsychyk: {hizzam1} thts limited partnership not limited liablity partnership
[16:43:30] mikelittle: {brugal84} There’s a comprehensive note in the course notes. there’s a BPP answer in the revision kit
[16:43:36] sunny20: {mikelittle} Every time I prepared F4, and I missed out some area. How do I cover each area in revision?
[16:43:50] mikelittle: I’m not sitting here to do the work for you – I won’t be there in the exam room with you
[16:43:56] SKHALID: {brugal84} they are all incorporated, members are not liable for debts, and have legal formalities
[16:44:03] mikelittle: You’re going to have to do some work for yourselves!
[16:44:07] hizzam1: {gutsychyk} oh yeah sorry !! my original question was how does limited parternship come to an end ?
[16:44:11] SKHALID: {mikelittle} lol
[16:44:13] mikelittle: And there’s only 7 days before your exam
[16:44:17] ladyjudge: whats the difference between co registers and the documents you submit in registration?
[16:44:20] SKHALID: {mikelittle} if u want sumthin done, do it urself 😉
[16:44:45] mikelittle: {hizzam1} There is one partner who is “responsible”
[16:45:34] mikelittle: The idea of an LLP is that it protects the “partners” from excessive liablility in the event that any one of them is found guilty of negligence which could potentially bankrupt them all
[16:45:39] mikelittle: Look at ADT v BDO
[16:45:43] SKHALID: {ladyjudge} co registers have things like register of members, debentureholders, directors etc
[16:45:56] mikelittle: {sunny20} Oh, come on Sunny!
[16:46:02] gutsychyk: llp is for professionals like accountants etc
[16:46:22] mikelittle: {hizzam1} By agreement
[16:46:29] SKHALID: {ladyjudge} those are kept at the registered office
[16:46:34] mikelittle: Or bankruptcy
[16:46:42] brugal84: thats more constructive-thank you
[16:46:58] SKHALID: {ladyjudge} what you send is less detailed, and not neccessarily all the registers
[16:47:17] mikelittle: {ladyjudge} company registers ( not likely to come up this time ) are the records which a company MUST keep by law
[16:47:25] ladyjudge: ok, i think i can get the difference now thanks skhalid
[16:47:38] mikelittle: Documents to be filed apply only once ( on registration )
[16:47:45] SKHALID: {ladyjudge} yh like mike said
[16:48:12] ladyjudge: ok
[16:48:13] mikelittle: {SKHALID} not always they aren’t
[16:48:40] gutsychyk: {mikelittle} wht is meant by rebutal and presumption ?
[16:48:53] gutsychyk: plesse contrast between them
[16:48:58] SKHALID: {ladyjudge} the registration application you only send things like company name, type, country, address of reg office, and articles used and proposed officers, statement of initial capitals, statement of complience
[16:49:13] mikelittle: {gutsychyk} to “rebut” in English is to prove something different than you would expect.
[16:49:32] mikelittle: A presumption is something you assume to be correct – until it’s rebutted
[16:50:05] gutsychyk: wht do u reckon if they ask abt rebutal ,i cant write alot on it. what would be the marking?
[16:50:22] brugal84: (gutsychyk) presumption is what is assumed to be the usual way, rebuttal is the argument against thi eg. its usual for family agreements to have no intention to create legal realtions, but in the case of the lodger and the competition (can’t remember the name) this was rebutted
[16:51:02] mikelittle: {gutsychyk} there’s really not much I could say about it either! As I said just a moment ago, rebuttal is to disprove a commonly held idea
[16:51:05] SKHALID: {gutsychyk} are you on about intention to create legal relations
[16:51:18] SKHALID: {gutsychyk} or u on about the presumptions of interpretation
[16:51:24] danielglover: Thanks for everything, Mike 🙂
[16:51:26] mikelittle: {brugal84} Simpkin v Pays
[16:51:28] gutsychyk: not specially abt intention to create legal relations
[16:51:37] brugal84: (mikelittle) thanks
[16:51:50] gutsychyk: i m asking in general if they ask, hwoever we can give example of domestic agreements
[16:51:53] mikelittle: {brugal84} {danielglover} welcome – you’re all welcome
[16:52:09] gutsychyk: but here i was talking abt general meaning and wht else can we write abt the world itself
[16:52:12] SKHALID: {gutsychyk} you can use cases
[16:52:34] gutsychyk: word* not world* lol
[16:52:35] mikelittle: {gutsychyk} I think I answered the “general meaning” bit
[16:52:48] gutsychyk: {mikelittle} was clarifying to skhalid
[16:52:48] SKHALID: {gutsychyk} lol
[16:53:12] gutsychyk: i hate tort !!!
[16:53:17] gutsychyk: otherwise law is good
[16:53:23] SKHALID: i think exam pressure is driving ppl nuts 🙂
[16:53:26] mikelittle: {gutsychyk} It’s a fun area
[16:53:28] gutsychyk: or may be its the way they have written in kaplan
[16:53:38] gutsychyk: i just dont like the structure in kaplan
[16:53:41] gutsychyk: for tort
[16:53:53] SKHALID: {gutsychyk} is it long?
[16:53:57] mikelittle: {gutsychyk} I’m not familiar with the Kaplan material
[16:54:00] gutsychyk: its not tht long
[16:54:10] lquach: {gutsychyk} try BPP text book for tort
[16:54:11] SKHALID: {gutsychyk} i use LSBF and its ok
[16:54:23] brugal84: i didn’t like tort when i did it from bpp book now i’m using lsbf and i get it, just the way it’s explained in certain books or by certain tutors i guess
[16:54:24] gutsychyk: but u know instead of explaining things on its own then giving cases , they have explained eveything with reference to cases
[16:54:32] lquach: they explained it quite well
[16:54:40] ladyjudge: is it ok to write case names other than those commonly in exam kits?
[16:54:43] SKHALID: {gutsychyk} so u want explanation then cases?
[16:54:59] madizworld09: is standard of care same as duty of care
[16:55:00] gutsychyk: i want explanation, then cases and then explanation in terms of cases
[16:55:02] mikelittle: {ladyjudge} yes – BUT DO NOT EVER MAKE UP A CASE NAME!!!!
[16:55:13] ksoomro: what excatly is Promoters Liability?
[16:55:15] SKHALID: {mikelittle} ahahahaha
[16:55:21] mikelittle: {madizworld09} No – ask an ACCA member
[16:55:35] madizworld09: and do we need to explain it in the context of professional negligence
[16:55:37] SKHALID: {ladyjudge} if u cant remember name just make a reference of what happened
[16:55:44] mikelittle: Standard of careis the standard you are expected to achieve
[16:55:57] gutsychyk: {ladyjudge} or u can say’in a decided case this happened’
[16:55:58] divine2010: Mikel is right, dont make up cases name
[16:56:05] mikelittle: Duty of care is that principle that we all have a duty to our legal neighbours
[16:56:18] SKHALID: {ksoomro} not to make profit :d
[16:56:34] ksoomro: what chapter is that in ?
[16:56:46] ksoomro: any clue
[16:56:47] SKHALID: {ksoomro} a promoter owes fiduciary duty to the company
[16:56:54] divine2010: donoghue v stevenson explained who neighbour is? am i right
[16:56:59] mikelittle: {ksoomro} Not to make a secret profit, to declare any interest they have in company contracts, to act with reasonable skill and care
[16:57:10] lquach: {divine2010} exactly
[16:57:12] gutsychyk: nott o make secret profit, not to take benefi from 3rd party, no conflict of interest
[16:57:20] madizworld09: ok….
[16:57:21] SKHALID: NEOGHBOUR DOESNOT EQUAL YOU NEXT DOOR NEIGHBOUR :d
[16:57:39] mikelittle: {divine2010} yes, but so do other examples – but the snail is a good example
[16:57:47] ksoomro: thanks Ladyjudge
[16:57:52] SKHALID: snail in the gingerbeer bottle 😀
[16:58:09] divine2010: give another example on neighbour
[16:58:25] SKHALID: {divine2010} there is a set definition
[16:58:27] mikelittle: {SKHALID} try explaining “ginger beer” to an overseas student who has never visited UK
[16:58:29] sajjadchangezi: {mikelittle} what are the remedies for wrong ful dismissal ??
[16:58:36] divine2010: i can only remember that of snail
[16:58:50] ksoomro: a beer saturated from Ginger
[16:58:57] lquach: neighbour is the person who closely and directly affected by my act that I had to have him in comtemplation as being affected when I’m directing my mind toward my act in question
[16:58:57] SKHALID: {mikelittle} it depends if its alcoholic or not 😉
[16:59:01] ksoomro: who would wanna know anyway .. just use the flippin term
[16:59:08] mikelittle: {divine2010} Desperately trying to remeber the case of the motorcyclist – it’ll come to me
[16:59:20] mikelittle: Bourhill v Young
[16:59:23] SKHALID: {lquach} good :d
[16:59:27] gutsychyk: i ll give example of something which is not neigbour, if A is riding his bike in speed and dies, the incident took place in front of trainstation, a woman B claims because of As act he lost his unborn child, thts oppostiye to neighbour principle. and too remote
[16:59:29] brugal84: (mikelittle) soft drink
[16:59:38] divine2010: remedies for wrongful dismissal are Reinstatement, re-engagement….
[16:59:46] SKHALID: {gutsychyk} 😮
[16:59:52] mikelittle: {sajjadchangezi} Oh Sajj, this must surely be explained in detail in your text!
[16:59:54] sajjadchangezi: {divine2010} no that are for unfair dismissal
[17:00:03] SKHALID: {divine2010} yh
[17:00:05] brugal84: (sajjadchangezi) damages only remedy for wrongful dismissal as it is common law
[17:00:09] divine2010: thanks mikel
[17:00:19] sajjadchangezi: {mikelittle} no it is’nt .. i am using bpp but there is’nt written much clear on it
[17:00:42] mikelittle: {gutsychyk} That’s Bourhill v Young
[17:00:47] gutsychyk: {sajjadchangezi} for wrongful, u can sue for damages orgo to ET within 3 months
[17:00:56] gutsychyk: if damage wont be for more than 25000
[17:01:18] sajjadchangezi: {gutsychyk} {brugal84} ok .. thanks
[17:01:21] gutsychyk: {mikelittle} yes it is !
[17:01:38] divine2010: is that d only remedy for wrongful dismisal?
[17:01:49] sajjadchangezi: {gutsychyk} but what if damge gets over 25000 ?
[17:02:00] gutsychyk: if its over sue for damages in court
[17:02:18] sajjadchangezi: ok
[17:02:24] gutsychyk: as wrongful dismissalis breach of contract , u can only sue for damages
[17:02:34] gutsychyk: {mikelittle} correct me if i m wrong
[17:02:40] ladyjudge: can some one tell me about legislation
[17:02:50] mikelittle: {sajjadchangezi} wrongful dismissal remedies – reinstatement, compensation
[17:03:04] gutsychyk: {mikelittle} thts for unfair not for wrongfullllllllllllll
[17:03:13] ladyjudge: contemporary sources of law
[17:03:27] mikelittle: {gutsychyk} no, if over 25000, sue in court
[17:03:31] sajjadchangezi: {mikelittle} no that are for unfair dismissal .. that is written in bpp text
[17:03:44] ladyjudge: the bit about legislation
[17:03:57] madizworld09: what is the centeral idea of unfair contract terms act 1977 and unfair terms in consumer contracts regulations 1999
[17:04:00] gutsychyk: {mikelittle} yeah i mentioned abt 25000 earlier
[17:04:04] divine2010: what is the difference btn unfair and wrongful dismisal?
[17:04:08] mikelittle: {gutsychyk} I think you’ll find it’s also wrongful – imagine, if your employer doesn’t follow the rules, then what can you do?
[17:04:11] SKHALID: WRONGFUL DISMISSAL = DAMAGES
[17:04:39] mikelittle: {gutsychyk} I was confirming what you had posted
[17:04:41] divine2010: unfair contract term is to protect consumer
[17:04:50] mikelittle: {divine2010} asked earlier, and answered
[17:04:52] gutsychyk: {mikelittle} yeah tht makes it constructive and i ll be eligible fo re eng and all tht
[17:05:30] SKHALID: wrongful dissmiddal is dealt with in County or High court and the limitation is 6years
[17:05:46] gutsychyk: {ladyjudge} sources r common law soruces of case law and equity, legislation and customs
[17:05:47] mikelittle: Guys, it’s 17.04 and the session finishes at 17.00
[17:06:08] divine2010: thanks so much mikelittle
[17:06:08] SKHALID: they can bring wrongful dissmissal to ET limitstion is 3months
[17:06:09] mikelittle: I’ve got some markking to do and then moore preparation – must go
[17:06:10] sajjadchangezi: reinstatement, re-engagment and compensation are remedies for unfair dismissal .. this is what is written in bpp text
[17:06:16] mikelittle: Good luck to all of you next week
[17:06:17] lquach: {gutsychyk} {SKHALID} {mikelittle} before we go I want to say thank you to all tutors here today
[17:06:24] gutsychyk: {mikelittle} thanks mike little
[17:06:34] divine2010: bye
[17:06:39] sajjadchangezi: {mikelittle} thanks …
[17:06:41] lquach: thanks for your help
[17:06:47] madizworld09: thnks
[17:06:57] SKHALID: tc ppl
[17:07:03] divine2010: you’ve really helped me with ds chat
[17:07:11] gutsychyk: {lquach} we r students skhalid as well, and revising helps us aswell
[17:07:18] divine2010: bye once again
[17:07:31] SKHALID: {gutsychyk} huh?
[17:07:56] lquach: {gutsychyk} good luck with exams
[17:08:07] SKHALID: now mike is gone 😀
[17:08:07] gutsychyk: {lquach} thanks
[17:08:22] SKHALID: where is ejeee 😡
[17:08:26] gutsychyk: {SKHALID} no he isnt
[17:08:28] gutsychyk: hes back
[17:08:29] gutsychyk: lol
[17:08:31] sajjadchangezi: yes 😀
[17:08:35] SKHALID: lol
[17:08:36] lquach: by the way where to find the content of the chat
[17:08:47] gutsychyk: history
[17:08:51] gutsychyk: {lquach}
[17:09:00] SKHALID: my bad 😛
[17:09:20] sajjadchangezi: {SKHALID} when will u start ur class ?
[17:09:29] lquach: where is history
[17:09:31] SKHALID: well if Mike is done i will start :d
[17:09:55] sajjadchangezi: {SKHALID} hey hold on . give us some break .
[17:09:58] SKHALID: {lquach} press the paper looking symbol in the middle of the screen
[17:10:05] SKHALID: {sajjadchangezi} ok 15mins 😛
[17:10:05] sajjadchangezi: am exhausted
[17:10:20] lquach: {SKHALID} great thanks
[17:11:37] SKHALID: TODAY I WILL COVER THE COMPANY LEGAL PERSONALITY & FORMATION AND IF WE GET TIME FRAUDULENT BEHAVIOUR
[17:12:06] sajjadchangezi: {SKHALID} how much time will it take ?
[17:12:14] lquach: {SKHALID} pls go on
[17:12:38] SKHALID: WELL…. let me see
[17:12:56] SKHALID: we can do doctrine in 10 mins
[17:13:22] SKHALID: we can do types of companies in 10mins
[17:13:34] SKHALID: sorry type*
[17:14:06] SKHALID: registration names and articles in 20 mins
[17:14:30] SKHALID: and statutory books records and returns in 10
[17:14:52] SKHALID: so hopefully i would allow an hour for it
[17:15:33] sajjadchangezi: ok fine .. will be back in 15 mins
[17:15:37] SKHALID: fraudelent behaviour we can cover insider dealing in 10 mins
[17:15:44] SKHALID: money laundering in 10
[17:15:57] SKHALID: fraudulent and wrongful trading in 10
[17:16:07] SKHALID: and pheneox company in 5 mins
[17:16:13] SKHALID: total 35 mins
[17:16:29] SKHALID: so i will extimate 1hour and 40 mins in case of any questions
[17:17:43] SKHALID: so take break and i will commence at half past
[17:19:50] SKHALID: GUYS MAKE SURE YOU HAVE APPROPRIATE PROFILE PICS, NO GUNS OR ANY OTHER WEAPONS (EUISDEM GENERIS RULE)
[17:30:22] SKHALID: so are we ready to start?
[17:30:39] SKHALID: ANYONE ?
[17:30:43] SKHALID: READY TO START?
[17:30:59] ladyjudge: yeah
[17:31:25] SKHALID: well its been over 15 minutes now so I am starting ppl will just have to catch up
[17:31:46] SKHALID: DOCTRINE AND VEIL OF INCORPORATION
[17:32:25] SKHALID: whenever you get a question on this topic it is wise to state the basic rule
[17:32:29] ladyjudge: ok, am new here, so how do we start
[17:33:02] SKHALID: BASIC RULE = A company is a seperate legal person
[17:33:22] SKHALID: The leading case here is Salomon v Salomon
[17:33:50] SKHALID: where it was established that A company is liable for its debts, notits memebrs nor its directors
[17:34:12] SKHALID: and also that A sole director or majority shareholder can be a creditor of a company
[17:34:35] ladyjudge: ok
[17:34:57] SKHALID: now if u want to know the scope of that case, please read in your own time as it will help with insolvency area
[17:35:30] SKHALID: there are other cases which you should try to remember as well
[17:35:36] ladyjudge: like?
[17:35:42] SKHALID: a case called Lee v Lee’s Farming
[17:36:08] ladyjudge: ok about a pilot who worked for his firm?
[17:36:13] SKHALID: Which derived that A sole director and majority shareholder can be an employee of the company
[17:36:16] SKHALID: {ladyjudge} YH
[17:36:48] ladyjudge: ok what other cases?
[17:37:14] SKHALID: there is another case called Macaura v Northern life Assurance, you can call it Macaura if you want for simplicity
[17:37:28] ladyjudge: And how do they examine this part?
[17:37:38] SKHALID: that one established that members or directors do not have any interest in the company’s property
[17:37:50] ladyjudge: about macaura?
[17:38:14] SKHALID: he wont examine each case, he will ask specifically about Doctrine of Incorporation
[17:38:31] SKHALID: he might ask about concequences
[17:38:40] ladyjudge: ok,tellm e more about macaura
[17:39:15] SKHALID: ok
[17:39:28] brugal84: r these sessions posted on site after their finisheed cos i just cleared my screen by mistake 🙁
[17:39:28] SKHALID: M owed a timber estate
[17:39:58] SKHALID: he formed a limited company which he owed all shares and sold timber estate to it
[17:40:06] madizworld09: concequences of what separate personality or case
[17:40:15] SKHALID: {madizworld09} i will come to that
[17:40:18] ladyjudge: the one that insured it in his name?
[17:40:30] SKHALID: {brugal84} i will try to get them posted
[17:40:34] madizworld09: {SKHALID} ok
[17:40:43] SKHALID: {ladyjudge} yh it is
[17:40:55] SKHALID: but it was destroyed by fire
[17:41:13] SKHALID: the estate
[17:41:14] SKHALID: i mean
[17:41:24] SKHALID: but he did transfer the insurance to the company
[17:41:31] SKHALID: which was the biggest mistkae
[17:41:43] ladyjudge: how
[17:41:54] SKHALID: because he couldnt claim for insurance
[17:42:01] SKHALID: it belonged to the company
[17:42:07] SKHALID: the legal person
[17:42:20] ladyjudge: ooh
[17:42:42] SKHALID: and although he was a member it was held a memebr is not interested on business property
[17:42:51] brugal84: (skhalid) thank u-trying 2 wrestle with an upset 7 month old baby and concentrate on the laptop at the same time very hard lol
[17:42:58] ladyjudge: so what we try to answer here is different scenarois of separate personality
[17:42:59] SKHALID: but he did recover the premiums
[17:43:25] SKHALID: {brugal84} oh dear , is it girl or boy?
[17:43:45] SKHALID: now i will move on to the consequences of registeration
[17:44:10] SKHALID: 1. Perpetual Succession
[17:44:22] SKHALID: if u cannot remmebr this phrase you can write the meaning
[17:44:54] SKHALID: basically although the company’s members or directors might cease to exist, that doesnt affect the company’s existence
[17:44:59] ladyjudge: i thought he put insurance in his name so when estate burnt he couldnt claim since co should have put claim
[17:45:24] SKHALID: {ladyjudge} he could claim coz he had transfered it to the company
[17:45:36] SKHALID: couldnt*
[17:45:44] ladyjudge: ok
[17:45:49] SKHALID: 2. It has a corporate name
[17:45:58] SKHALID: so it owns property in that name
[17:46:03] ladyjudge: about perpetual succesion?
[17:46:03] SKHALID: makes contracts
[17:46:27] SKHALID: {ladyjudge} SKHALID: basically although the company’s members or directors might cease to exist, that doesnt
affect the company’s existence
[17:46:42] SKHALID: i am doing corporate name
[17:46:45] ladyjudge: co doesnt die?
[17:46:50] SKHALID: {ladyjudge} yh
[17:47:16] madizworld09: {SKHALID} that’s the perpetual succesion right
[17:47:17] ladyjudge: what else/
[17:47:19] SKHALID: so it can incur liability
[17:47:24] SKHALID: sue and be sued
[17:47:45] ladyjudge: its like an artificial co
[17:47:51] SKHALID: and also the veil of incorporation separates the ownership from management
[17:47:57] SKHALID: {ladyjudge} yh
[17:47:58] ladyjudge: person i mean
[17:48:14] SKHALID: so company makes contract with third parties
[17:48:20] ladyjudge: how?
[17:48:38] SKHALID: {ladyjudge} through its agents
[17:49:00] SKHALID: company has contracts with memebrs, directors and other employees
[17:49:15] ladyjudge: no i mean separate ownership from mgt
[17:49:23] SKHALID: so THIRD PARTIES CAN SUE THE COMPANIES NOT WHAT IS BEHIND THE VEIL
[17:49:36] ladyjudge: ok
[17:49:36] SKHALID: {ladyjudge} that is the veil of incorporation
[17:50:11] SKHALID: and it is also subject to requirements of the CA2006
[17:50:19] madizworld09: {SKHALID} so memberz cannot sell the assets since the assets are in name of company
[17:50:35] ladyjudge: what more about incorporation
[17:50:38] SKHALID: {madizworld09} no that is not their job
[17:51:21] SKHALID: the veil can be lifted, and the usual result is that memebrs or and directors become personally liable for the company debts
[17:51:29] madizworld09: ok
[17:51:36] SKHALID: statutory examples
[17:51:52] SKHALID: 1. plc trading without a trading certificate
[17:52:05] ladyjudge: i dont understand your question
[17:52:07] SKHALID: 2. fraudulent trading and wrongful trading
[17:52:10] madizworld09: {SKHALID} i am confused what you have mentiond earlier about property
[17:52:19] SKHALID: {ladyjudge} i ddnt ask a question
[17:52:28] SKHALID: i am talking about how the veil can be lifted
[17:53:38] ladyjudge: tort of passing off
[17:53:45] SKHALID: {madizworld09} in that case, the property belonged to the company, as it is a legal person only the company can claim for an insurance policy, the member did not have the insurance under his name
[17:54:01] SKHALID: further about lifting the veil
[17:54:05] sajjadchangezi: m back… sorry guys for being late …
[17:54:07] madizworld09: {SKHALID} ok
[17:54:16] SKHALID: the phoenix company
[17:54:34] sajjadchangezi: but infact sorry to me for hav missed lots of topics .. 🙁
[17:54:48] SKHALID: this is were ther is a restriction on re-use of a name of insolvent company
[17:55:19] majorie: hi sorry i have just joined now
[17:55:20] SKHALID: there is also a few common law examples were it can be leifted
[17:55:32] sajjadchangezi: what is the topic now ???
[17:55:56] madizworld09: {sajjadchangezi} separate legal personality
[17:55:59] ladyjudge: lifting the veil is what we are discussing
[17:56:10] sajjadchangezi: lol
[17:56:12] madizworld09: {sajjadchangezi} lifting the veil
[17:56:17] sajjadchangezi: ok
[17:56:33] SKHALID: Woolfson Case (for simplicity) established that the veil will be lifted only where special circumstances exist indicating the veil is a mere facade concealing the true facts’
[17:57:08] SKHALID: i will briefly discuss the case
[17:57:29] ladyjudge: what of the guy guilty of passinf off
[17:57:44] SKHALID: W owned the premises which he leased to a company of which he was the director and controlling shareholder
[17:58:10] SKHALID: I APOLOGISE TO NICE GUY FOR KICKING HIM OUT THE OTHER DAY
[17:58:23] sajjadchangezi: 😮
[17:58:28] SKHALID: {ladyjudge} I WUDNT CALL IT PASSING OFF
[17:58:32] sajjadchangezi: what for ?
[17:58:54] SKHALID: {sajjadchangezi} kicking him out
[17:59:05] sajjadchangezi: {SKHALID} ok what for ???
[17:59:05] SKHALID: anways
[17:59:19] SKHALID: {sajjadchangezi} he woz saying things i found offensive
[17:59:22] ladyjudge: hmm
[17:59:31] SKHALID: anways
[17:59:34] sajjadchangezi: 😮
[17:59:41] sajjadchangezi: u shud hav warned him 1st
[17:59:43] nice_guy: {SKHALID} rather it was the opposite. u were saying thing i found offensive
[18:00:23] nice_guy: {sajjadchangezi} correct .. she should have warned or say something and not jus t kick me out to prove her point right
[18:00:27] ladyjudge: ok back to topic guys
[18:00:39] nice_guy: ok sorry guys.. get back to studies
[18:00:44] sajjadchangezi: {nice_guy} {SKHALID} hey u both hold on .. this is not the case which we were goin to discuss.. back to f4 now
[18:00:44] nice_guy: 🙂 all the best
[18:00:58] ladyjudge: thanks nice guy
[18:01:06] SKHALID: can i have silence please 😡
[18:01:23] sajjadchangezi: lol .. 😀
[18:01:26] SKHALID: so mr woolf sold the premises to the council
[18:01:28] sajjadchangezi: is any one taling ?
[18:01:30] sajjadchangezi: talking*
[18:01:33] SKHALID: and the council said they wont pay him
[18:02:02] ladyjudge: why
[18:02:28] ladyjudge: is he guilty of making secret profit?
[18:02:51] SKHALID: due to the owner-ocuupier statutory —as he woz both the oowner and occupier he cant be paid
[18:03:18] ladyjudge: didnt know about that
[18:03:25] ladyjudge: tell me more
[18:04:00] SKHALID: mr woolf argued that he and the company was seperate
[18:04:33] SKHALID: but they council had compulsorily purchased it coz it was against statute
[18:04:49] madizworld09: how is that
[18:04:51] SKHALID: as he was director and shareholder
[18:05:35] SKHALID: he was both a director and a member owning that property
[18:05:47] SKHALID: we did say the case before
[18:05:52] SKHALID: that they have no interest
[18:05:58] SKHALID: in the companys property
[18:06:05] madizworld09: ok
[18:06:05] SKHALID: mooving on now
[18:06:47] sajjadchangezi: ok
[18:06:48] SKHALID: we should all know the types of companies i will skip that bit
[18:06:55] sajjadchangezi: 😮
[18:07:04] SKHALID: ok i will do it
[18:07:09] sajjadchangezi: 🙂
[18:07:13] SKHALID: so we have plc and ltd
[18:07:27] SKHALID: a plc is limited and only by shares
[18:07:44] SKHALID: an ltd can be limited or unliminted
[18:07:50] sajjadchangezi: cant it limited by gaurentee ??
[18:07:55] SKHALID: if its limited it can be by shares and gurantee
[18:07:58] sajjadchangezi: be*
[18:08:02] SKHALID: yh
[18:08:20] SKHALID: and plc DOESNT have to trade on the stock market
[18:08:22] ladyjudge: yeah
[18:08:47] SKHALID: so lets look at major differences between PLC and LTD
[18:09:03] SKHALID: LIMITED LIABILITY
[18:09:10] madizworld09: {SKHALID} plc or ltd
[18:09:28] madizworld09: {SKHALID} ltd cant be traded on stock markrt
[18:09:33] SKHALID: it is not the liability of the co that is limited
[18:09:41] sajjadchangezi: {SKHALID} hey wait .. i hav been taking plc and ltd same so far …
[18:09:45] SKHALID: if its company limited by shares
[18:09:46] sajjadchangezi: r they different
[18:10:02] SKHALID: its only kimited to the amount unpaid
[18:10:14] SKHALID: {sajjadchangezi} they are differeny
[18:10:24] SKHALID: {SKHALID} that is y i am telling the differences now
[18:10:56] sajjadchangezi: hmm io
[18:10:57] sajjadchangezi: ok
[18:11:01] SKHALID: co limited by shares can call for amount anytime regardless being LTD or PLC
[18:11:46] SKHALID: company ltd by guarantee , the members are limited to an agreed amount
[18:12:00] SKHALID: and only called for when company cannot pay its debt
[18:12:36] SKHALID: UNLIMITED companies, members are liable to full extent
[18:12:58] SKHALID: there is also a difference in the way they raise capital
[18:13:13] SKHALID: its illegal for ltd to advertise to the public
[18:13:27] SKHALID: public companies can
[18:13:51] SKHALID: theres also difference in no.of directors PLC 2 LTD can have
[18:13:56] SKHALID: 1
[18:14:26] SKHALID: PLC must have a company secretary immediately after incorporatioN
[18:14:45] SKHALID: SORRY
[18:15:03] SKHALID: i mean to say that PLC must have qualified secretary
[18:15:25] SKHALID: ltd CAN CHOOSE and they dnt need to be wualified
[18:15:31] SKHALID: qualified*
[18:16:10] SKHALID: Commencement of business: LTD can begin immediately
[18:16:24] SKHALID: PLC have toget trading certificate
[18:16:57] SKHALID: Minimum Capital PLC = £50000 , none for LTD
[18:17:14] SKHALID: now i am saying all but if u get a question just say as much as mark allocated
[18:17:40] SKHALID: there are more but i think those are enough
[18:17:53] sajjadchangezi: ok what is about 12500 ??
[18:18:08] SKHALID: 12500?
[18:18:12] sajjadchangezi: yes
[18:18:27] SKHALID: where?
[18:18:44] SKHALID: i ddnt say 12500
[18:19:06] sajjadchangezi: min. cap for plc is 50000 bbut .. one shud pay atleast 12500 in cash like this
[18:19:18] sajjadchangezi: no i hav read it in my notes
[18:19:26] SKHALID: u dnt need to say that
[18:19:41] SKHALID: u can if u want
[18:20:20] SKHALID: other things are common sense like admin requirements, LTD dnt need to have AGM
[18:20:21] sajjadchangezi: k
[18:20:36] SKHALID: mooving on
[18:20:56] SKHALID: COMPANY REGISTERATION
[18:21:09] SKHALID: what is a promoter?
[18:21:38] sajjadchangezi: a person that promotes a company .. means who forms a company when it is not formed yet
[18:21:43] SKHALID: lol
[18:21:47] SKHALID: ok
[18:21:56] SKHALID: i will allow it
[18:22:01] sajjadchangezi: 😮
[18:22:03] madizworld09: {SKHALID} hold on before moving to that tell me Quasi partnership
[18:22:03] SKHALID: but there is a set definition
[18:22:24] SKHALID: {madizworld09} what is that?
[18:22:51] sajjadchangezi: {SKHALID} i wud’nt be sitting here if i would remember bookish definations
[18:23:02] taowhid: a promoter is a person who take necessary step to form a company
[18:23:14] SKHALID: ‘A PROMOTER IS A PERSON WHO UNDERTAKES TO FORM A COMPANY AND WHO TAKES THE NECESSARY STEPS TO ACCOMPLISH THAT PURPOSE’
[18:23:21] madizworld09: itx there in lifting the veil under evasion or obligations
[18:23:43] SKHALID: {madizworld09} not in my notes
[18:24:18] SKHALID: A promoter owes what and to whom?
[18:24:49] madizworld09: {SKHALID} its like there are few members who are running the company and all are actively involved in itx affairs
[18:25:27] SKHALID: {madizworld09} if its not in my notes, its of lesser important and i dnt kno nothing bout it
[18:25:38] sajjadchangezi: {madizworld09} Entity that joins one or more other entities in an enterprise (such as a joint venture or strategic alliance) that resembles a partnership but actually is not one.
[18:25:46] madizworld09: and operated the company for years and fall out then and trying to remove one or more of the members
[18:26:30] SKHALID: hmmm ok
[18:26:45] SKHALID: A PROMOTOR OWES FIDUCIARY DUTY TO THE COMPANY
[18:26:53] sajjadchangezi: {SKHALID} 😮 … one of my teacher said that it is imp. this session .. it may be examined this time ….
[18:26:55] madizworld09: {sajjadchangezi} ahan ok
[18:27:10] SKHALID: i.e. he must not make a secret profit out of the promotion
[18:27:25] madizworld09: {sajjadchangezi} i have come across the same
[18:27:28] SKHALID: and he must make closure to the company in case of any profits
[18:27:51] SKHALID: if he makes profit and hides it
[18:28:02] sajjadchangezi: {madizworld09} ok we’ll discuss on it later on
[18:28:04] SKHALID: the company may rescind the contract
[18:28:22] SKHALID: claim damages for any loss caused
[18:28:33] SKHALID: and make him pay up
[18:28:41] SKHALID: i.e. give the profit/ account
[18:28:49] madizworld09: {sajjadchangezi} ok
[18:29:15] SKHALID: REGISTERATION PROCEDURES
[18:29:48] eJeee: {SKHALID} ok
[18:30:07] SKHALID: an application form for registeration has to be filed in, you dnt need to nkow the name but if u remeber its good (FORM IN01)
[18:30:16] SKHALID: that form states the following
[18:30:43] sajjadchangezi: {SKHALID} u hav jumped over a topic
[18:30:44] sajjadchangezi: 😀
[18:30:59] eJeee: {sajjadchangezi} shhhhh she is our teacher, and teacher is always right
[18:31:36] SKHALID: details of the company (proposed name, type of co, country of reg office and address, articles used i.e. statutory or entrenched
[18:32:11] sajjadchangezi: {eJeee} lol .. we’ve got a jumpy teacher 😀
[18:32:26] SKHALID: proposed officers – signed particulars and consent to act as directors and secretary
[18:32:36] eJeee: {sajjadchangezi} shhh she will kick us
[18:32:37] eJeee: 😀
[18:32:45] SKHALID: statement of initial capital so nominal value, amount paid up and class
[18:33:29] SKHALID: I WILL DO SHOULD A BUSINESS BE CO OR PARTNERSHIP IN A MOMENT SAJJAD :X
[18:33:59] SKHALID: Statement of compliance this is signed by promoter
[18:35:18] SKHALID: A memorandum of Association which states each subcriber and who agrees to become a memebr and to take at least one share followed by signiture
[18:35:48] SKHALID: Articles , if none then statutory articles will automatically be put instead
[18:35:55] SKHALID: and registeration fee
[18:36:11] SKHALID: PLCs also need a TRADING CERTIFICATE
[18:36:23] SKHALID: so a separate application has to be made
[18:36:48] SKHALID: to get it a PLC must do the following:
[18:37:20] SKHALID: 1. has issued shares totaling to 50000 in nominal value
[18:37:50] SKHALID: .2 each is paid up by at least 1/4 on nominal plus the whole of premium
[18:38:18] sajjadchangezi: {SKHALID} yesss this is what i was saying … ur 2nd point
[18:38:20] SKHALID: 3. the amount of preliminary expenses and who paid or is to pay for them
[18:38:26] sajjadchangezi: what is it ???
[18:38:35] SKHALID: 4. any benefits given or to be given to promoters
[18:38:54] SKHALID: {sajjadchangezi} figure out what pre means and u will get ur answer 😀
[18:39:12] sajjadchangezi: no .. i m asking about ur 2nd point
[18:39:16] sajjadchangezi: not 3rd
[18:39:31] SKHALID: {sajjadchangezi} each share
[18:39:41] SKHALID: must be paid up by at least 1/4 of nominal
[18:39:49] SKHALID: but full of any premiums
[18:40:17] SKHALID: if a co trades without a certificate what are the consequences?
[18:40:47] sajjadchangezi: the court will order to wind up the company
[18:41:02] SKHALID: {sajjadchangezi} for example if i make you pay 1.75 per share, u need to pay the 75p in full and atleast 1/4 of the £1
[18:41:10] sajjadchangezi: n here the veil is lifted …
[18:41:38] SKHALID: 1. the co and any officer who is in default is liable to a fine
[18:42:27] SKHALID: 2. any transactions made that are not fulfilled within 21 days of being required to the directors become jointly and severally liable to TPs
[18:43:08] SKHALID: and yes sajjad
[18:43:12] SKHALID: winding up
[18:43:30] SKHALID: WHAT ARE PRE-INCORPORATED CONTRACTS?
[18:43:57] sajjadchangezi: as by its names.. any contract before the incorporation of company
[18:44:07] SKHALID: good
[18:44:17] sajjadchangezi: any contract that promoter binds
[18:44:20] SKHALID: but entered to on behalf
[18:44:24] SKHALID: ys
[18:44:28] madizworld09: a new terms on the same terms must be expressly created and thus cannot be ratified
[18:44:39] SKHALID: the legal effect of a pre-inc contract?
[18:44:47] sajjadchangezi: company is not laible for pre incorporation contract
[18:44:56] SKHALID: YES THEY CANNOT ENFORCE IT
[18:45:05] SKHALID: {madizworld09} yes
[18:45:33] SKHALID: the TP cannot enforce contract
[18:45:36] SKHALID: against the company
[18:45:42] sajjadchangezi: tp ??
[18:45:48] SKHALID: Third Party
[18:45:53] sajjadchangezi: lol
[18:45:54] madizworld09: third party
[18:45:55] sajjadchangezi: ok
[18:46:03] SKHALID: but the TP can sue the promoter
[18:46:15] SKHALID: and vice versa
[18:46:31] SKHALID: and if the promotor and the TP get together 😉
[18:46:40] sajjadchangezi: ok i got a qst
[18:46:58] SKHALID: they can agree to ‘transfer’ the contract to the company
[18:47:04] SKHALID: this is called novation
[18:47:08] SKHALID: {sajjadchangezi} ask
[18:47:18] sajjadchangezi: who’ll be laible for a pre incorporation contract .. if it ends so long even the co. is incorporated ,,,
[18:47:49] sajjadchangezi: the co. is formed but the time period of contract is not end
[18:47:55] SKHALID: the promotor or anyone else i.e. director
[18:48:06] sajjadchangezi: y director ?
[18:48:28] sajjadchangezi: as we studied earlier .. co is a seperate legal identity
[18:48:29] SKHALID: anyone who makes a contract before incorporation
[18:48:35] sajjadchangezi: so co. shud be laible for that
[18:48:48] SKHALID: the MD can make commercial contracts remember
[18:49:01] SKHALID: but the co is not born yet lol
[18:49:02] sajjadchangezi: {SKHALID} yeh ..thats the promoter who makes the contract .. but he makes it on behalf of co
[18:49:16] SKHALID: UNTIL THE CO IS BORN
[18:49:32] SKHALID: co doesnt know anyhting
[18:49:41] SKHALID: imagen like baby 😀
[18:49:57] SKHALID: Mooving on
[18:50:32] SKHALID: BUT AS I SAID anyone who makes a pre-inc contract on behalf of the company is laible to TP
[18:51:03] sajjadchangezi: {SKHALID} ok .. got it
[18:51:04] madizworld09: hmm ok
[18:51:06] SKHALID: coz the promotor will decide the first directors of the company and this is usually before the company is formed
[18:51:24] SKHALID: COMPANY NAMES
[18:51:38] SKHALID: we should all know this 😀
[18:51:42] madizworld09: {SKHALID} so can promoters b first directprs as well
[18:51:45] SKHALID: comon common sens
[18:51:49] sajjadchangezi: {madizworld09} yes
[18:51:55] madizworld09: ok
[18:52:14] SKHALID: {madizworld09} i promoter is suppose to form the company, there is nothing that says he cannot be director
[18:52:24] sajjadchangezi: 😮
[18:52:46] sajjadchangezi: the promoter may become a director of the comp.
[18:52:48] sajjadchangezi: ??
[18:53:18] SKHALID: dont say that, but there is nothing in our sylabbus that says he cannot be or can be
[18:53:41] madizworld09: {SKHALID} ahan
[18:53:43] SKHALID: WE SHUD ALL KNOW: public last words must end with PLC
[18:53:55] SKHALID: and private LTD
[18:54:08] sajjadchangezi: yes
[18:54:24] SKHALID: but there is no requirement for private unlimited companies
[18:54:34] SKHALID: i can name my comapny SKHALID
[18:54:36] SKHALID: thats it
[18:54:39] sajjadchangezi: co. names shud be registered in the registrar of co.
[18:54:59] SKHALID: so PLC cannot put LTD
[18:55:00] sajjadchangezi: n me… CHANGEZI PLC
[18:55:02] sajjadchangezi: 😀
[18:55:06] SKHALID: and vice versa
[18:55:14] SKHALID: {sajjadchangezi} lol
[18:55:33] SKHALID: if the name already exists u cant have it :p
[18:55:43] sajjadchangezi: yea obviously
[18:55:49] SKHALID: if the name is a criminal offense, u cannot have either
[18:55:56] sajjadchangezi: yes
[18:56:05] sajjadchangezi: i know 1 case on it
[18:56:07] sajjadchangezi: 😀
[18:56:16] SKHALID: like in USA it is a criminal offense apparently to shout HITLER lol
[18:56:23] SKHALID: so u cannot have HITLER PLC
[18:56:25] SKHALID: ahahahahaha
[18:56:30] sajjadchangezi: lol
[18:56:32] SKHALID: anways
[18:56:35] madizworld09: lol
[18:56:57] SKHALID: if the name is offensivein the opinion of the Secretary of State
[18:57:01] SKHALID: u cnt have it
[18:57:05] SKHALID: u dnt need example for this
[18:57:10] SKHALID: but if she clearly says
[18:57:14] SKHALID: u cant have this name
[18:57:17] SKHALID: u cnt have it
[18:57:19] sajjadchangezi: we can qoute a case ‘ buttercup v margerine ‘
[18:57:33] SKHALID: sure if u wan to 😀
[18:58:06] SKHALID: Approval Restrictions
[18:58:34] SKHALID: so a name that suggest a connection to HMG or local authority u need permission
[18:58:48] sajjadchangezi: hmm
[18:58:51] SKHALID: so if i name my co PRINCE CHARLES BIG EYES
[18:58:56] SKHALID: i need his permission
[18:59:10] SKHALID: I DNT THINK HE WILL GIVE 4 THAT 1 😀
[19:00:05] SKHALID: and any word or phrase in a statutory instrument i.e. National, European, British, University etc U NEED PERMISSION
[19:00:19] SKHALID: UNWISE CHOICES include the following
[19:00:31] SKHALID: Phoenix company
[19:01:12] SKHALID: simila name of an existing business for example if PIE LTD exists and I name mine PIE PLC they may use tort against me
[19:02:11] SKHALID: OR a name which is too like an existing reg name i.e. BARCLAYS PLC, BARQLAYS PLC 🙁
[19:02:38] SKHALID: or a name which might mislead ppl of the nature of the business
[19:03:03] SKHALID: the registered name can be altered
[19:03:10] SKHALID: ONLY BY SPECIAL RESOLUTION
[19:03:24] SKHALID: and an application to the Registrar
[19:03:40] SKHALID: thus special resolution – 75% majority
[19:03:42] sajjadchangezi: the only remedy for this is that thte court orders the new co. to change tis naem
[19:03:46] sajjadchangezi: name
[19:03:56] SKHALID: THAT IS COMPULSORY CHANGE
[19:04:06] sajjadchangezi: yes
[19:04:26] SKHALID: so this can be done by tort
[19:04:31] SKHALID: of passing off
[19:04:38] sajjadchangezi: but what if i put new next to my co. name ..
[19:04:45] sajjadchangezi: do i also hav to change it ??
[19:05:02] SKHALID: only if the tort of passing off rules apply
[19:05:29] SKHALID: name same as or too like the existing
[19:05:46] SKHALID: name gives misleading indication of nature of activities
[19:06:08] SKHALID: misleadin info given when applying for a name
[19:06:15] SKHALID: it tort it is different
[19:06:19] sajjadchangezi: who’ll determine that i m commiting tort of passing off.. if i showthat i m not in such intentions
[19:06:39] SKHALID: {sajjadchangezi} the other company mst prove the following 2 the court
[19:07:03] sajjadchangezi: what ?
[19:07:17] SKHALID: 1. that ur using a name or selling products similar to the claimant
[19:07:36] SKHALID: 2. that persons are mislead in believing that ur business is the claimants
[19:07:51] SKHALID: 3. that it has caused damage to the claimant business or will do so
[19:08:15] SKHALID: if the claimant wins u will pay damages
[19:08:17] sajjadchangezi: hmm ok
[19:08:33] SKHALID: damages is optional
[19:08:45] SKHALID: depends on court dedcidsion
[19:08:47] SKHALID: sorry
[19:08:51] sajjadchangezi: what will be the damages then … do i need to change my name only ?? or i hav to pay some fines
[19:08:54] SKHALID: u will b given injucntion
[19:08:59] sajjadchangezi: ok
[19:09:03] SKHALID: if there was loss
[19:09:10] SKHALID: then the court might award damages
[19:09:19] SKHALID: they will just tell u not to use it
[19:09:34] SKHALID: moving on
[19:09:47] SKHALID: should we take break?
[19:09:53] sajjadchangezi: lol ..
[19:10:05] sajjadchangezi: i m back from a long break ..
[19:10:09] sajjadchangezi: i hav stemina
[19:10:20] sajjadchangezi: 😀
[19:10:27] sajjadchangezi: what about others ?
[19:10:40] sajjadchangezi: knock knock .. any one else home ???
[19:10:55] madizworld09: no problem with me
[19:11:01] madizworld09: go ahead 🙂
[19:11:20] SKHALID: ok then we have articles of association, object clauses and ultra vires statutoru books records… then we can have break and come back to do fraudulent behaviour, its a short topic
[19:11:22] madizworld09: {SKHALID} i guess u need a break
[19:11:34] sajjadchangezi: {madizworld09} definelty u wont hav any prob. coz its skhalid who is teaching us
[19:11:35] sajjadchangezi: 😀
[19:11:44] SKHALID: lol
[19:11:51] madizworld09: {sajjadchangezi} lol
[19:12:04] SKHALID: ARTICLES OF ASSOCIATION
[19:12:31] SKHALID: every co must ave one
[19:12:47] SKHALID: but there are no mandatory contents
[19:12:58] sajjadchangezi: else 3 of us.. all others r class dreamers.. 😀
[19:13:01] SKHALID: a co can make its own
[19:13:10] SKHALID: {sajjadchangezi} yh well
[19:13:50] sajjadchangezi: ok
[19:13:53] SKHALID: if the co doesnt make its own then statutory model articcles become its articles FOREVER :d
[19:14:01] SKHALID: i added the last bit 😀
[19:14:08] sajjadchangezi: a co. can make its own ..but it shud comply with model articles ??
[19:14:23] SKHALID: {sajjadchangezi} it doesnt have to comply if it has its own
[19:14:24] sajjadchangezi: or it shud comply with law
[19:14:35] madizworld09: {SKHALID} ok so can it make amendments later on
[19:14:50] SKHALID: {madizworld09} only by special resolution
[19:14:56] madizworld09: {SKHALID} ok
[19:14:58] sajjadchangezi: ok what will prevail if thr is a clash in co. a.o.a and model artical
[19:15:01] sajjadchangezi: article
[19:15:06] SKHALID: but the statutory cannot be amended
[19:15:18] madizworld09: {SKHALID} right
[19:15:20] SKHALID: there isno clash
[19:15:26] SKHALID: u make ur own u follow it
[19:15:42] SKHALID: if u dnt make ur own u must follow the model statutory one
[19:16:02] sajjadchangezi: but some times it happens that what ever articles i set may not b allowed by statuute
[19:16:22] SKHALID: the articles are basically displaying contracts binding of the following NERDS 😀
[19:16:33] SKHALID: 1. MEMBERS TO CO
[19:16:46] SKHALID: 2. CO TO MEMMBERS
[19:16:55] SKHALID: 3. MEMBERS 2 MEMBERS
[19:17:34] sajjadchangezi: {SKHALID} what about my qst 😡
[19:17:40] SKHALID: {sajjadchangezi} well u cannot go against statute but the contents as i have said are not mandatory u can make ur own contents to suit u as long as u are not breaking other statutes
[19:18:06] SKHALID: the model is not statute
[19:18:29] SKHALID: it is called statutory only coz u must have articles and if u dnt that is why they come in
[19:18:32] sajjadchangezi: {SKHALID} yeh thats what i was saying that articles should comply with statutes
[19:18:45] sajjadchangezi: else it will not b effective
[19:19:04] SKHALID: yh but that is obvious, u dnt need 2 tell examiner that
[19:19:34] sajjadchangezi: lol … examiner will b happy more .. 😀
[19:19:44] SKHALID: so as i have said UR OWN statute and emphasise on UR OWN can be amended by special resolution i.e. 75% majority
[19:19:51] sajjadchangezi: he’ll thank me on that
[19:19:53] sajjadchangezi: 😉
[19:19:57] SKHALID: LOL
[19:20:11] SKHALID: lets go thorough the restrictions
[19:20:25] sajjadchangezi: ok
[19:20:27] SKHALID: ENTRENCHED ARTICLES
[19:20:29] sajjadchangezi: hey
[19:20:32] sajjadchangezi: hold on
[19:20:51] sajjadchangezi: we hav’nt discussed that what is mentioned in articles
[19:20:57] sajjadchangezi: what r they for ??
[19:21:31] SKHALID: i did say what they are for scroll back, u dnt need to know what is in them
[19:21:40] SKHALID: less for us to do 😀
[19:22:08] SKHALID: the articles are basically displaying contracts binding of the following NERDS
SKHALID: 1. MEMBERS TO CO
SKHALID: 2. CO TO MEMMBERS
SKHALID: 3. MEMBERS 2 MEMBERS
[19:22:16] sajjadchangezi: ok ..
[19:22:24] sajjadchangezi: is this M.O.A OR A.O.A
[19:22:26] sajjadchangezi: ??
[19:22:31] madizworld09: {sajjadchangezi} aoa
[19:22:35] SKHALID: ok
[19:22:40] sajjadchangezi: k
[19:23:24] SKHALID: so the company can have specified procedures for amendment of other things apart from special resolution
[19:23:33] sajjadchangezi: ok can any one tell me in brief what is moa then ??? n y it is ineffective …
[19:24:21] madizworld09: {sajjadchangezi} cuz itx now incorporated in AOA
[19:24:23] SKHALID: this is called entrentchment
[19:24:33] sajjadchangezi: huhhh
[19:24:38] sajjadchangezi: whats entrenchment ??
[19:24:46] SKHALID: 😡
[19:24:53] sajjadchangezi: 🙁
[19:25:13] SKHALID: to give it more security
[19:25:16] SKHALID: the articles
[19:25:18] SKHALID: may be
[19:25:39] SKHALID: made to account for amendment procedure
[19:25:51] SKHALID: to restrict how they are amended
[19:26:00] SKHALID: rather then special resolution
[19:26:34] SKHALID: so lets say we want to make a restrictio of amending the articles
[19:26:52] SKHALID: we include that restriction in the article
[19:27:35] SKHALID: such as all agree i.e. as memebrs
[19:27:44] SKHALID: or by court order
[19:28:15] SKHALID: please go through this again in ur own time
[19:28:26] madizworld09: {SKHALID} sure
[19:28:43] SKHALID: howver we cannot do the following:
[19:28:51] SKHALID: increase a members liability
[19:29:07] SKHALID: so we cannot make an alteration to increase sajjads liability
[19:29:16] SKHALID: unless we drug him and make him sign it 😀
[19:29:23] SKHALID: 😮 oops
[19:29:26] SKHALID: hehehehehe
[19:29:36] sajjadchangezi: ok now i got the difference btween moa n aoa .. it is the moa deals with matters outside the company .. like relationship of com. with outsiders…. while aoa deals with the issues inside a co.
[19:29:47] sajjadchangezi: like appointment , removal of directors
[19:30:26] SKHALID: and also the alteration has to be bona fide :d
[19:30:31] SKHALID: LATIN WORDS
[19:30:37] madizworld09: {sajjadchangezi} finally u got it 😉
[19:30:38] sajjadchangezi: {SKHALID} lol … thanks for alerting me … i’ll never trust u 😀
[19:30:49] SKHALID: meaning for the benefit of the company as a whole
[19:30:55] sajjadchangezi: {madizworld09} lol ./… finally on my own .. u guys didnt help me 🙁
[19:31:28] SKHALID: {sajjadchangezi} u dnt necessarily need to know that for the exam
[19:32:12] madizworld09: {SKHALID} what if that discrminate the minorities
[19:32:24] SKHALID: so if we decide to put an objective clause
[19:32:31] sajjadchangezi: {SKHALID} EXAMINER HAS SAID IN ARTICLE THAT HE’LL ASK THE MOA THIS TIME
[19:32:35] SKHALID: it has to be for the benefit of the business as a whole
[19:32:50] SKHALID: {sajjadchangezi} let him ask
[19:33:30] SKHALID: anways
[19:34:01] SKHALID: Third parties can enforce ultra vires contracts against co
[19:34:22] Shunmas: ultra vires =beyond powers ?
[19:34:23] SKHALID: where the co acts ultra vires
[19:34:36] SKHALID: outside its objective clause
[19:34:40] SKHALID: yh
[19:34:46] Shunmas: 😉
[19:34:55] SKHALID: the co may ratify an ultra vires contract
[19:35:19] sajjadchangezi: {SKHALID} do u want to take some break ???
[19:35:25] SKHALID: no
[19:35:29] sajjadchangezi: lol 😀
[19:35:30] SKHALID: summ ppl are pming me:x
[19:35:38] sajjadchangezi: 😮
[19:35:50] sajjadchangezi: hey ppl … pm in the main …
[19:36:00] SKHALID: any member can get injunction to stop the company entering into ultra vires transation
[19:36:18] sajjadchangezi: {SKHALID} i offer u to take a break 😉
[19:36:37] SKHALID: no thanx
[19:37:07] SKHALID: if a director commits breach of dduty that is also ultra vired
[19:37:11] SKHALID: vires*
[19:37:44] majorie: can i join/
[19:37:46] majorie: ?
[19:38:02] SKHALID: and if the co is unable to continue on business within limits of its objects clause any memebr can get it compulsory wound up
[19:38:10] sajjadchangezi: incoming is free.. outgoing is not allowed 😀
[19:38:18] sajjadchangezi: {majorie} that was to u
[19:38:37] SKHALID: mooving on
[19:38:51] SKHALID: STATUTORY BOOKS, RECORDS, AND RETURNS
[19:39:29] SKHALID: i have said that cos must have reg offices
[19:39:47] SKHALID: it must b situated in country stated, so no lying
[19:40:09] SKHALID: the address mus t b told to MR REG
[19:40:19] sajjadchangezi: {SKHALID} hey … madizworld has asked a qst that ‘ what if that discrminate the minorities ??? to protect do they need a special resolution ??
[19:40:29] SKHALID: and the reg office can b changed by ordinary resolution
[19:40:48] SKHALID: {sajjadchangezi} WHAT DISCRIMINATES?
[19:41:07] sajjadchangezi: {SKHALID} i dont know .. she msged me on my cell ..
[19:41:11] sajjadchangezi: scroll up …
[19:41:41] SKHALID: i dnt see it
[19:41:46] sajjadchangezi: she said she got a power failure at her place … n she is off now
[19:42:05] sajjadchangezi: scroll up ..u’ll see her qst
[19:42:51] SKHALID: discrimination is not allowed, end of, on anything asits statute
[19:43:35] SKHALID: the resolution must be done by the board
[19:43:37] sajjadchangezi: ok her qst is this that .. how minorites will protect their right ?? do they need to pass a special resolution or what ?
[19:43:50] SKHALID: but its not affective till MR REGISTRAR is told
[19:44:51] SKHALID: {sajjadchangezi} no there shouldn’t be anything about minories , no discrimination if others take advantage it will be known, i have said bona fide
[19:45:30] SKHALID: they are not making it for themselves, no selfishess
[19:45:32] sajjadchangezi: bona fide for whom ?
[19:45:40] SKHALID: the benefit of the co as a whole
[19:45:45] sajjadchangezi: ok
[19:46:03] SKHALID: STATUTORY REGISTERS
[19:46:22] SKHALID: the following MUST be kept at the Reg office
[19:46:32] sajjadchangezi: so there wud’nt be any resolution if the majority is acting on their own benefit ?
[19:47:01] SKHALID: {sajjadchangezi} they must state the reason, so they cant
[19:47:09] sajjadchangezi: hmm ok
[19:47:13] sajjadchangezi: hey
[19:47:26] sajjadchangezi: i need to get away for some time
[19:47:26] SKHALID: 1. Reg of memebrs
[19:47:35] sajjadchangezi: am sorry 🙁
[19:47:40] SKHALID: 2. reg of debenturesholders
[19:47:48] SKHALID: 3. reg of charges
[19:47:58] SKHALID: 4. ref of directors
[19:48:03] SKHALID: reg*
[19:48:12] SKHALID: 5. reg of directors interests
[19:48:36] SKHALID: PLC must keep an extra reg. of notifiable interests
[19:48:54] SKHALID: LTD must keep extra reg. of written resolutions
[19:49:09] SKHALID: {sajjadchangezi} iw ill finish co son
[19:49:41] SKHALID: SHUNMAS?
[19:50:06] SKHALID: STATUTORY RECORDS
[19:50:27] SKHALID: these also must be kept at reg office
[19:50:46] SKHALID: 1. BALANCE SHEET
[19:50:56] SKHALID: 2. PROFIT & LOSS ACCOUNT
[19:51:03] SKHALID: 3. CASHFLOW STATEMENT
[19:51:12] SKHALID: 4. DIRECTORS REPORT
[19:51:19] SKHALID: 5. AUDITORS REPORT
[19:51:36] SKHALID: 6. GROUP COMPANIES(PARENT COMPANIES ONLY)
[19:52:07] SKHALID: ACCOUNTING RECORDS
[19:52:18] SKHALID: must be sufficient
[19:52:50] SKHALID: must show and eplain co transactions and discolose financial position at any time and
[19:53:15] SKHALID: to enable the directors to ensure that the annual records give tru and fair view
[19:53:23] SKHALID: so must show day to day sentries
[19:53:28] SKHALID: entries*
[19:53:41] SKHALID: of receipts and expenditure
[19:53:51] SKHALID: a record of assets and liabilities
[19:54:03] SKHALID: and if dealing with goods:
[19:54:18] SKHALID: statemnt of stock held at end of each year
[19:54:24] SKHALID: all statement of stockholding
[19:54:52] SKHALID: statement of all goods sold, purchased
[19:55:05] SKHALID: if its not retail then they must include who the buyers and sellers are
[19:56:24] SKHALID: OTHERS: copies of minutes of board and general meetings, and directors contract servies
[19:56:50] SKHALID: STATUTORY RETURNS
[19:57:33] SKHALID: must to be made to the registrar i.e. changes of directors, special resolutions, annual reports and accounts
[19:58:20] SKHALID: I AM TAKING A BREAK NOW AND WILL FINISH OFF WITH WHETHER TO BE A CO OF PARTNERSHIP AND ALSO FRAUDULENT BEHAVIOUR
[20:01:11] sajjadchangezi: ok …
[20:01:41] sajjadchangezi: i m signing off now .. nd will get online back in 5 mins
[20:01:48] SKHALID: sure
[20:02:11] sajjadchangezi: nd thanks for every thing u wrote above … 🙂
[20:02:18] sajjadchangezi: i hav read all of them
[20:02:28] SKHALID: no prob
[20:02:38] SKHALID: shunmas was keepin me company lol
[20:02:51] sajjadchangezi: ok .. brb
[20:10:54] hilariousastal: {SKHALID} well last time i visited this room i had seen over 10 people and now only 5 … u are scaring people away SKHALID.. 🙂
[20:11:30] SKHALID: {hilariousastal} not really, they were many ppl here, but some left coz they are tired of study, not coz of me
[20:11:48] hilariousastal: {SKHALID} hehe…
[20:12:18] SKHALID: {hilariousastal} shhhhhh
[20:12:39] hilariousastal: :%%:
[20:13:31] SKHALID: {hilariousastal} Oi shut it :d
[20:25:54] sajjadchangezi: {SKHALID} will be back here in some time
[20:26:08] SKHALID: i will in 4 mins
[20:28:52] SKHALID: right lets kick this exam :d
[20:29:50] Shunmas: yes
[20:30:15] SKHALID: SHOULD A BUSINESS BE A CO. OR A PARTNERSHIP?
[20:30:20] Shunmas: yea
[20:32:00] SKHALID: IF ASKED THIS QUESTION u must give the advantages of being a co, rather than partnership and also disadvantages
[20:32:10] Shunmas: k
[20:32:11] SKHALID: PROS:
[20:33:00] SKHALID: Perpetual Succession I.E. Company doesnt cease to exist though members and directors might cease to exist
[20:33:04] Shunmas: limited liability
[20:33:06] Shunmas: ys
[20:33:19] SKHALID: with partnership if one dies the partnership is over
[20:33:26] Shunmas: 🙁
[20:33:31] SKHALID: 2. Limited liability
[20:33:36] SKHALID: {Shunmas} wots wrong?
[20:33:42] SKHALID: u r rite :d
[20:33:48] Shunmas: 1 is Perpetual succ…
[20:33:52] Shunmas: 2. is …ok
[20:33:54] Shunmas: pls go on
[20:34:20] SKHALID: {Shunmas} it just mean that co is an artificial person, it doesnt die
[20:34:26] Shunmas: yea
[20:34:34] Shunmas: co is an artificial person
[20:34:49] SKHALID: 3. Greater access to capital funding
[20:35:14] SKHALID: with co if its plc u can get funding from public
[20:35:20] Shunmas: yes
[20:35:22] Shunmas: new issue
[20:35:25] Shunmas: nd rights issue
[20:35:27] Shunmas: later
[20:35:31] SKHALID: if ltd then privately but easier than partnership
[20:35:42] Shunmas: yea
[20:36:01] SKHALID: partnership u are limited as some partners will not have a lot to give
[20:36:40] SKHALID: and also if u remeber PLC must have minimum of 50000 capital
[20:36:58] SKHALID: in partnership there is no minimum
[20:37:15] Shunmas: yes
[20:37:21] Shunmas: wait
[20:37:28] Shunmas: an interesting case here
[20:37:31] SKHALID: 4. Ability to seperate ownership from management
[20:37:51] SKHALID: {Shunmas} i meant u can get more capital as company than partnership
[20:38:14] Shunmas: Bhullar v Bhullar …these brothers came to the UK in 1950s and set up a shop, even today they are having the same shop and both families living on tht shop
[20:38:14] Shunmas: yes
[20:38:30] Shunmas: partnership
[20:38:46] SKHALID: SO with co. the veil of incorporation exists, with partners each partner is liable for any debts
[20:39:13] Shunmas: u when u lift the veil, u see an ugly woman
[20:39:17] Shunmas: yea
[20:39:19] SKHALID: lol
[20:39:24] Shunmas: yes Mike said that
[20:39:26] Shunmas: in his lectures
[20:39:28] SKHALID: u beta not b talkin bout me
[20:39:43] SKHALID: CONS:
[20:40:03] Shunmas: ys
[20:40:05] Shunmas: pls
[20:40:32] SKHALID: Compliance with CA2006
[20:40:41] SKHALID: so more admini