Law and the Corporation Case Study Example | Topics and Well Written Essays - 2000 words

Law and the Corporation - Case Study Example in that location are two types, one, as mentioned above is a Public Limited partnership, and the other is a backstage Limited Company, which as the name suggests cannot sell its divides to the general public. In the UK, the Companies Act permits several people to work on a attach to for any occupancy that is lawful. Private companies are the easiest kind of company to begin as well as run in their initial stages. Companys name should always end with Limited or Ltd (Ewan 2004 p 20).Lugi must pull through in mind that this type of company is often a family cable directors of these firms tend to be shareholders and are involved in the running of the organization. Normally the shares of Private Companies can notwithstanding be transferred to another person if the consent of all the other shareholders is obtained. Private Limited Companies as does a PLC have to apply to the Registrar of Companies, submitting a number of documents, whi ch have to be delivered to the Registrar of Companies at Companies House. The two most important are the Memorandum of Association and Articles of Association, in addition to these there is a statutory Declaration, which states that the requirements of the Companies Act have been followed. When the registrar is satisfied, then a certificate of incorporation will be given, the company can then begin trading at once (World Bank 2007 p5).I would advice Lugi to start his business as a limited company as just 2 share capital is requisite to set up a private limited company. Limited Companies are made with a share capital that is authorized (authorized dual-lane out capital) as well as with a share capital which is issued (issued shared capital). The authorized share capital can be called the total number of shares that exist in a company which is multiplied by the nominal value of distributively share. But he must keep in mind that not all such shares might have been issued. The issu ed share capital is incisively same calculation in respect of each and every one of the issued shares. A company that is combine in England as well as Wales can be made with whichever number of shares of any value, in any currency. For instance, there might be 10,000 shares with a nominal value of 1p, or 100 shares each of 1. In both cases the share capital would came out to be 10 (Henry 2006 p 19).Advantages for Limited CompanyThe core reasons why Lugi should open a limited company is as follows Control of the company cannot be lost to outsiders, much people are prepared to risk money because shareholders have limited liability, more capital can be raised because there is no limit to the number of shareholders and, the company is a separate legal entity and therefore, as such has a continuous legal being, separate from the individuals who are its shareholders. Its existence is unaffected by changes in the directors and other shareholders, and the work of the business can thus c arry on with a minimum of interruption (contrast this with the death of a sole proprietor) (Stephen 2000 p 10).DisadvantagesLike every business fifty-fifty limited business has risks, Lugi must be fully prepared to manage those risks and disadvantages. They are as followsshared profits among a larger amount of people, the legal procedure to set up the business, as a consequence of this there is a cost in