Company Law: Characteristics of Sole Trader Partnership, EU Functions and Policies, Rights of Shareholders and Rules of Directors

Company Law

TABLE OF CONTENT
INTRODUCTION.....................................................................................................................................3
TASK1.....................................................................................................................................................3
TASK2.....................................................................................................................................................6
TASK3.....................................................................................................................................................9
CONCLUSION.......................................................................................................................................11
REFERENCES.........................................................................................................................................12

INTRODUCTION
Company law is the body of law governed with different relations, rights that are
being conducted of persons, organisations, companies and business practices. This provides
out a legal practice which is being related to Corporation and also govern out the
responsibilities and rights related to companies and the process related to rights of directors,
dissolution and registration of company. This mainly a practice which is being related to all
the commercial and contract law. The main purpose of this law is it helps out to maintain the
standards, also provides resolution of disputes, maintaining law and order and also protecting
the rights and liberties of corporations and individuals1. This report will cover characteristics
of sole trader partnership of public and private companies with different functions of EU and
policies needed for regulation of companies. With the rights of shareholders and the rules of
directors. Furthermore, it will also cover the role of auditor, Priority of creditors and the
winding up process.
TASK1
Sole proprietorship is also known as sole trader is mainly all the business activities
which are being privately owned by one individual and they will not be any kind of legal
distinction between the business practice and the owner. All the profits are being gained by
the owner itself and they will have unlimited responsibilities on account of losses and debts.
It is mainly a form of business in which single owner used to carry out total responsibilities
of the organisation and the business is mainly being run by a sole owner all die risk and the
failure of business lies on the owner itself. Single man is mainly the organisation of all such
business practises2. There are some important characteristics of sole proprietorship for
public and private companies which are like firstly they have sole ownership as a single
person used to carry out all the business practises and that person relates to all the risk and the
profit that is being arise in the business practice and they were being personally liable for all
the agreements. Secondly there is mainly Limited work area which is being provided to the
sole proprietorship as all the capital acquiring is limited so the organisational skill with the
individual is limited. Thirdly no legal formalities are being needed in all such business
practises as all other business organisations need proper registration but in sole proprietorship
1 Ferran E, 'Corporate Mobility And Company Law' (2016) 79 The Modern Law
Review
2 Wymeersch E, 'Company Law In Europe And European Company Law' [2017] SSRN
Electronic Journal

There will not be any kind of formalities in regarding to their public and private business
practice. Fourthly, All the public and the private sole trader business practices have to
maintain inefficient tax structure as they do not have to return tax that were being filed for
businesses and again for the company’s profit and loss. As they can pass a small portion of
their companies profit and loss to their personal income tax return. Other than that, all the
corporation will have to file corporate tax return. Sole trader will have to pay self-
employment tax3.
European Union directs and codify all the European company law through which
they try to operate and maintain the separate company act in order to maintain a proper
compilation of directive principles and regulations. This mainly helps out to establish all the
efficient laws for the companies and also to maintain corporate governance framework.
European Union used to undertake all the employees, investor and all the improvement
related to business environment and EU. The main function of EU companies is like to
conduct Cross-border economic activities which helps out to maintain the globalisation and
better business transactions and also implements out companies to make friendly relations
and terms and also increase the growth in production. Second important function is to carry
out business on single EU brand name. As European Union focus on maintaining all the
regulations and directive principles according to their laws and with that, they try to
implement all the business practises to be carried out according to the brand name of EU.
Thirdly it helps out to encourage the export and import business activities in whole EU
countries. As their main motive is to enhance the business and also to outgrow their resources
and production the proper validity and for that they try to maintain their treaties and
globalisation with proper import and export facilities and providing all the countries a better
profit and production with their goods and services4. Other than that, the EU companies focus
on providing all internal market with a proper sustainable development and with all the
prevention of social exclusion and advancement in their technological development. All the
EU companies follow all the important regulation with the harmonisation of their national
rules and also follow the cross-culture trade and business treaties.
Incorporation is usually a process through which new and all the existing business
can be registered as limited company. A company is mainly being known as a separate legal
entity which has their own perpetual identity for all those who used to run it. All such
3 Lim E, 'Attribution In Company Law' (2017) 77 The Modern Law Review
4 Oliver M, and Marshall E, Company Law (Pitman 2016)