British company law - Free Essay Example

Sample details Pages: 7 Words: 2029 Downloads: 6 Date added: 2017/06/26 Category Law Essay Type Analytical essay Did you like this example? Question One It has become clear that the issue at hand relates to shareholders’ rights. It has been established in evidence that the Table A Articles of Association provide for two classes of shares: ordinary and preference. Ordinary shares are exactly what their name suggests, they carry with them all the rights and responsibilities of a regular shareholder of the company. Don’t waste time! Our writers will create an original "British company law" essay for you Create order The issue reaches frustration point when one considers the rights of those who hold preference shares, however. The Articles of Association provide that the preference shareholders have no participatory rights, nor do they have any rights to vote in general meetings. In addition to this, it is alleged that the directors of the company, who hold 80% of the ordinary shares of the company between themselves, are attempting to use their positions in a selfish manner, seeking to gain financially from their positions. This brief sets out to inquire into these issues, and critically analyse them in the context of British company law. While it has been established that the directors of Sunkit Ltd own 80% of the ordinary shares, there is no mandate for them to hold shares in the company in order to act as a director. The 1985 version of the Table A Articles does not provide for this requirement. For the purposes of the first analysis, it is important to consider the directors within the co ntext of being shareholders of the company, and not in terms of their official appointments. It is alleged by the preference shareholders that a scheme is proposed that would serve to reduce the preferential dividend paid to preference shareholders from 7% to 2%, with the rationale being based on commercial losses. Given that the Articles of Association provide for the dividend to be 7%, any alteration to this amount would require an alteration to the Articles. This can only be done by a special resolution at a general meeting.[1] In order for a special resolution to be passed at a general meeting of shareholders, 75% of the total votes cast must be in favour of the resolution.[2] There is also a provision that would allow the directors of the company to propose a special general meeting in writing, rather than having a physical meeting.[3] Considering this in the context of the facts at hand, the directors of Sunkit Ltd could quite legally pass a resolution amending the Articles of Association in this regard. The directors hold over 75% of the ordinary shares that are eligible to vote at general meetings (80% in fact), and could quite easily pass this resolution if they all voted in favour of the resolution, either personally or by proxy.[4] The passing of this resolution would be deemed to have been accepted by the members, and will take effect provided it is not in breach of legislation or any other law regarding corporate governance.[5] This would, however, need to be done at a general meeting using a special resolution, and not by an ordinary resolution. In regards to the alleged proposed cancellation of the preference shares, the board would not be permitted to do this where such an action would be deemed to be unfair.[6] The court would consider whether such an action can be deemed to be to be fair either between different classes of shareholders,[7] or between shareholders of the same class.[8] In this scenario, we would see that the preference shar eholders would not be paid any return for their investments, and hence one would conclude that this scheme hardly seems fair and equitable. Common law also suggests that, where a reduction of capital was to take place, the preference shares would be the last class of shares to be reduced.[9] This would effectively provide for an equitable scheme, showing that both ordinary and preference shareholders receive relatively equal treatment in regards to the reduction of capital within the company. Reduction of capital can only occur where power is granted by the Articles of Association (there is provision in article 34 of Table A), and this power can only be exercised by special resolution in an identical procedure to the case previously outlined. The reduction of capital would then need to be effected by the Court, or else it will not have a binding value.[10] Given that the rights of preference shareholders are not given legal certainty and are subject to common law interpretation, it may be recommended that the preference shareholders seek to have a provision inserted into the Articles of Association that requires any reduction of capital to be approved by them at a separate class meeting, as it would be deemed to be a variation of shareholder rights. This provision would be similar (if not identical) to the one discussed in Re Northern Engineering Industries plc [1994] 2 BCLC 709. There is a certain amount of protection for the preference shareholders at common law in regards to reduction of capital; however it would be in their best interests to seek rigid entrenchment in the articles of the company. In regards to the alleged proposal regarding the ability of directors to issue preference shares to themselves, this would quite clearly be in breach of common law provisions. These provisions have since been given effect in legislation. For example, if a director seeks to use his power to issue shares in an attempt to favour a particular class of shareholders at the expense of another group of shareholders without their consent, then such an allotment of shares would be deemed to be invalid by the Courts.[11] This principle is further enhanced through section 80 of the Companies Act 1985, which regulates the ability of the directors of the company to issue shares, outlining various requirements of disclosure and transparency. Such an action by the directors of Sunkit Ltd could not possibly succeed, as it is clearly outlawed at a legislative level. Question Two Part A The building in question is alleged to have been sold at a price that was significantly lower than the value determined by the independent valuation. At the time the property was sold, it could be argued that the directors of the company had knowledge that Company XYZ Ltd was struggling to pay its debts as and when they fell due, hence the need to turn assets into capital. It is assumed, for the purposes of this question, that the auditor that was appointed to act o n behalf of the company was appointed in coherence with relevant governing legislation.[12] This raises questions in regards to the directors and the performance of their duties. Given that the company was bordering on being insolvent, one would assume that a director would try and extract maximum value out of a transaction, rather than disposing of an asset for ‘quick cash’. There is evidence at common law that a director must act â€Å"in the interests of the company† when exercising their power to dispose of the company’s property.[13] Given the gross neglect of the value given to the directors by the auditor, it is clear that this did not happen; hence the directors (in this circumstance) may be liable for action in the Courts for breach of their duty as a fiduciary of the company. Part B This question revolves around the conversion of a substantial loan into a floating charge. The use of a floating charge meant that the company was still free to deal with the assets used to secure the charge during their normal course of business, without any consent of the chargee. The floating charge then ‘crystallises’ when, for example, the company ceases business.[14] This would turn a floating charge into a fixed charge, and allows the creditors to seek recourse from these assets in order to recover their debts. This effectively makes the company liable to pay the debt (provided it was the company that took the debt and not the director herself). Obviously if the company is found to be liable for the debt, then assets will be sold by the administrator as per standard winding-up procedures in order to pay the creditors. Part C This question differs in kind from that in Part A. We see, in fact, the opposite occurring. Rather, company property was sold at a grossly excessive price, when the property was valued by the auditor at being significantly less than then sale price. This question, then, revolves around the iss ue of fraudulent trading. It appears in the evidence that the purchaser of the property was misled into believing that the property was worth  £15 million, rather than the  £4 million it was in fact sold for. Under legislation, any person who seeks to intentionally defraud the creditors of a company may be held liable to make contributions to the company’s assets as the court sees fit,[15] or alternatively the court may seek to disqualify that person from being a director of a company.[16] Where a contribution by the director is deemed necessary by the courts, such an action can only be made during a winding up, however the director may be liable for criminal proceedings at any time.[17] In this scenario, given that the conduct of the director did not lead to a financial loss to the company in regards to this transaction, it would appear that disqualification from directorship would be a more likely option. The director, Janet, may be liable for criminal prosecution as a result of her actions in defrauding the creditor in the sale of the property. Part D There is a key distinction to be made between the concepts of ‘wrongful trading’ and ‘fraudulent trading’. Wrongful trading means that the director did not take all reasonable steps to ensure that the company did not become insolvent upon entering into the transaction, and hence relies more so on negligence on the part of the director.[18] Fraudulent trading, on the other hand, has its basis more on the intent of the director, where the intention was always to defraud a party.[19] The concept of fraudulent trading is further discussed at a common law level, which further entrenches the notions of intent and blatant dishonesty.[20] These concepts have been dealt with in the case of Company XYZ Ltd, and it has been established that there have been incidences of fraudulent trading, which tends to carry more severe criminal charges if the case is substantiated. Bibliog raphy Books Mayson, S, French, D and Ryan, C, Mayson, French and Ryan on Company Law (2003, 19th ed), London: Oxford University Press Sealy, LS, Cases and Materials in Company Law (2001, 7th ed), London: Butterworths Walmsley, K (ed), Butterworths Company Law Handbook (2003, 17th ed), London: LexisNexis Butterworths Legislation Companies Act 1985 Company Directors Disqualification Act 1986 Insolvency Act 1986 Cases British and American Trustee and Finance Corporation Ltd and reduced v Couper [1894] AC 399 Harben v Phillips (1882) 23 ChD 14 Howard Smith Ltd v Ampol Petroleum Ltd [1974] AC 821, PC JJ Harrison (Properties) Ltd v Harrison [2002] 1 BCLC 162 Poole v National Bank of China Ltd [1907] AC 229 Re EB Tractors Ltd [1986] NI 165 Re Floating Dock Co of St Thomas Ltd [1895] 1 CH 691 Re Northern Engineering Industries plc [1994] 2 BCLC 709 Re Patrick and Lyon Ltd [1933] Ch 786 Re Peveril Gold Mines Ltd [1898] 1 Ch 122 Re Woodroffes (Musical Instruments) Ltd [1986] CH 366 Scottish Insurance Corporation Ltd v Wilsons and Clyde Coal Co Ltd [1949] AC 462 Welton v Saffrey [1897] AC 299 Whitehouse v Carlton Hotel Pty Ltd (1987) 162 CLR 285 1 Footnotes [1] Companies Act 1985, s 9(1). [2] Companies Act 1985, s 378(1) and (2). [3] Companies Act 1985, s 381A. [4] Harben v Phillips (1882) 23 ChD 14, 32 and 35-6 (Cotton LJ and Bowen LJ). [5] Welton v Saffrey [1897] AC 299, 329 (Lord Davey). See also Re Peveril Gold Mines Ltd [1898] 1 Ch 122. [6] Poole v National Bank of China Ltd [1907] AC 229, 239 (Lord Macnaughten) [7] Ibid. See also Scottish Insurance Corporation Ltd v Wilsons and Clyde Coal Co Ltd [1949] AC 462, 486 (Lord Simonds). [8] British and American Trustee and Finance Corporation Ltd and reduced v Couper [1894] AC 399, 406 (Lord Herschell LC). [9] Re Floating Dock Co of St Thomas Ltd [1895] 1 CH 691. [10] Companies Act 1985, s 135(1). [11] Howard Smith Ltd v Ampol Petroleum Ltd [1974] AC 821, PC. See also Whitehouse v Carlton Hotel Pty Ltd (1987) 162 CLR 285 for an Australian example. [12] Companies Act 1985, s 25. [13] JJ Harrison (Properties) Ltd v Harrison [2002] 1 BCLC 162, 173 (Chad wick LJ). [14] Re Woodroffes (Musical Instruments) Ltd [1986] CH 366. [15] Insolvency Act 1986, s 213. [16] Company Directors Disqualification Act 1986, s 10. [17] Companies Act 1985, s 458. [18] Insolvency Act 1986, s 214. [19] Insolvency Act 1986, s 213. [20] Re EB Tractors Ltd [1986] NI 165. See also Re Patrick and Lyon Ltd [1933] Ch 786.

Essay on Jewish Marriage - 1203 Words

Marriage is a significant part of Judaism bringing together a woman and man under God’s reign. It is the mitzvah (122) â€Å"To marry a wife by means of ketubah and keddushin† (Deut 22:13), all Jewish adherents see marriage as a necessity in order to obey God and to experience the fullness of life. In Genesis God says: â€Å"It is not good for the man to be alone. I will make a helper suitable for him.† It is a link between individuals and the wider community as it recognises two individuals coming together, celebrated by the wider community. Also the marriage ceremony itself contains symbolic significance to Judaism, conveying Jewish beliefs through symbols, actions and words. The mitzvah of marriage is especially important as it involves what†¦show more content†¦During the preparations of the marriage a â€Å"ketubah† (pre-nuptial agreement) is presented from the groom to the bride (as the mitzvah of marriage states should happen). It is written in Aramaic, the original language used in the earlier generations showing the significance of tradition for Jews (mainly orthodox and conservative). This document outlines the responsibilities of the husband during the marriage and if the marriage terminates. It is important because it is the way the community can ensure the individuals are protected should something go wrong and there is support of the woman in case of death or divorce. Other preparations of marriage include the bride immersing in a mikvah (ritual bath) to cleanse herself for her new life with her husband. Also both bride and groom fast on the day of their wedding. Both these practices highlight the significance of marriage as they are both practices used to mark an important holy event in Judaism, for example, Jewish people fast on â€Å"Yom Kippur† the most holy day of the Jewish year. 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Management in Global Environment Friedman

Question: Discuss about theManagement in Global Environmentfor Friedman. Answer: Introduction The study has been divided into two broad divisions. The first part talks about globalisation and Friedman has described it. It has been found that the world is becoming flat due to the impact of globalisation. This has eventually created risk for many because globalisation is no longer between two countries but it has turned to be between companies. In order to combat against the increasing competition, these companies are undertaking major steps that might create risks for the people in the globalised world. The other part of the paper talks about the organisational culture followed at Toyota. The management is highly focused towards creating a collaborative culture and promotes diversity in the organisation. Although it is Japanese car manufacturer, the Company has always valued the culture of other regions where it operates. E-learning Activities Thomas Friedman on Globalisation; 3 Eras of Globalisation; World is flat Risks of Living in the Flat World of Globalisation: Friedman has talked about the globalisation and how the world is going flat with everything connected to each other. The primary risk is that in a globalised world whatever can be done will be done. The concern is whether it will be done by a person or to the person. Secondly, it has been pointed out that the globalisation is no longer between two countries but it is between two companies (Fredman 2015). This has automatically created the economic competition beyond ones imagination. The liberal arts education is going to matter the most in this flat world. Thus, the risk of living in this flat globalised world is increasing. Iron Rule of the Flat World: With the increased connectivity and the availability of options to transmit information, innovation and any secret information are likely to pass on within fraction of seconds. Thus, Friedman has proposed one single Iron rule to be followed in the business. When the world is flat, whatever can be done, will be done (Zheng et al. 2014). The second great rule is the idea of convergence. Out of convergence, we all are learning the habit of convergence. Lastly, Friedman has talked about the three most influential countries in the process of globalisation these are India, China and the former Soviet (Glenberg 2014). These are the countries that are utilising the phenomenal objective of the flat world. Globalisation Level Across the World: Globalisation is level is not uniform around the world. Countries like China, India have more impact than other countries like USA because one of the key symbolisms of globalisation is business outsourcing that is carried on in these countries (Darling-Hammond 2015). In addition to it, it has also been evident that the Indian and Chinese population are taking away the jobs in the developed nations. This has automatically disturbed the balance of the level of globalisation. Toyotas Corporate Culture and the Problem of Spreading its Culture Toyota has emerged as the worlds top car manufacturer company in terms of its production system. The car manufacturer has aimed high and the key principle inculcated in the organisation is by its management. The production system requires management to set the employees at different levels of the organisation. However, strong emphasis is made when it comes to building the corporate culture at the organisation (Collins et al. 2015). The organisation has always seen the opportunity in the other markets and has always undertaken the cultural aspect of the particular country in its business operation. MITs Steven Spear has put forwarded the same cultural perspective that is followed at Toyota. As pointed out by him that although it is a Japanese brand, the management has always considered American culture in its business activities. Toyotas corporate culture is also focused towards the innovative approach as well as focused towards the people of the organisation. The 7 dimensions of the corporate culture can be discussed here: Innovation and risk taker: The car manufacturer encourages innovation at each step of designing and manufacturing the cars (Jayamaha et al. 2013). Individual initiative: The mangers and the employees are also given individual authorities to come up with their individual approach towards any kind of management decision. This creates a unique culture in the organisation that supports everyones point of view. People oriented: For Toyota, the employees come first. The management always give credit to the employees for their hard work and success is noteworthy (Arifin 2014). Team work: The Company completely believes in team work and always encourages the same. The management advocates team work by giving due recognition to employees in al levels. Aggressive: The Company is aggressive towards its management decision in order to maintain competition in the market where it operates (Anitha and Begum 2016). Shared values: The organisation completely believes in shared values and always gives the opportunity to the people of the organisation to present their view and opinion. Communitarians: Apart from the individualism, the organisation also supports communitarians as it gives a wider perspective of knowledge in terms of innovation or technology that is the main focus of the car manufacturer (Anitha and Begum 2016). The success of Toyota worldwide can easily be given to the cultural values that they share among the employees at different levels of management. Although it is Japanese Company, it never fell short of its expectation in treating the culturally diverse people right. Conclusion: With the detailed analysis of the impact of globalisation it has been evident that the world is turning flat indeed and the scope of the business to get close to each other is increasing. The globalisation is no longer a matter between two countries but it has become a perspective of two companies in the intense competitive market. On the other hand, the culture at the Toyota has been friendly and concerned enough to put together the people to achieve the common objective for the business. The success of the organisation worldwide can be given to the organisational culture easily. References: Anitha, J. and Begum, F.N., 2016. Role of Organisational Culture and Employee Commitment in Employee Retention.ASBM Journal of Management,9(1), p.17. Arifin, H.M., 2014. The influence of competence, motivation, and organisational culture to high school teacher job satisfaction and performance.International Education Studies,8(1), p.38. Collins, K.F., Muthusamy, S.K. and Carr, A., 2015. Toyota production system for healthcare organisations: prospects and implementation challenges.Total Quality Management Business Excellence,26(7-8), pp.905-918. Darling-Hammond, L., 2015.The flat world and education: How America's commitment to equity will determine our future. Teachers College Press. Fredman, T.L., 2015. The World Is Flat A Brief History Of The 21St Century. Glenberg, A., 2014. Few Believe the World Is Flat.Canadian Journal of Experimental Psychology,68(4), p.250. Jayamaha, N.P., Wagner, J.P., Grigg, N.P., Campbell-Allen, N.M. and Harvie, W., 2014. Testing a theoretical model underlying the Toyota Wayan empirical study involving a large global sample of Toyota facilities.International Journal of Production Research,52(14), pp.4332-4350. Zheng, L., Feng, L. and Yong-Shi, W., 2014. Exotic electronic states in the world of flat bands: From theory to material.Chinese Physics B,23(7), p.077308.