Company Law Assignment - Solved

Added on - 11 Jan 2021

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Company Law
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................11.1 Analysing whether Alan, Bob and Cassy are in breach of duties under Companies Act2006........................................................................................................................................11.2 Providing remedies available to Bob in terms of Companies Act 2006...........................1TASK 2............................................................................................................................................22.1 Concept of separate legal personality...............................................................................22.2 Advantages of companies over sole proprietorship and partnerships..............................22.3 Advice to Ann regarding claim for compensation...........................................................33.1 Analysing the validity of agreement.................................................................................33.2 Remedies available to recover the debt in terms of Companies Act 2006......................4TASK 4...........................................................................................................................................44.1 Comparing and Contrasting the Companies Act 2006 with Companies Act 1985 with anattention to the procedures established in order to incorporate companies............................4CONCLUSION................................................................................................................................5REFERENCES................................................................................................................................7
INTRODUCTIONCompany law is quite helpful for the organisation so that it can carry business operationsin that way which is not detrimental to interest of customers and other stakeholders. Presentreport deals with various case scenarios which are directly related to Companies Act 2006 ofUK. The remedies and fair judgements are provided by various sections of Act which are helpfulto organisation and its stakeholders as well. The Act provides fast and effective judgement inaccordance to the disputes and any other aspects occurred in organisation.TASK 11.1 Analysing whether Alan, Bob and Cassy are in breach of duties under Companies Act 2006Companies Act 2006 governs and regulates organisation in UK. ABC Ltd was formed in2014 financial year by three directors in carrying out business operations in the best possiblemanner. On of the director named Bob was blamed for loss making firm and removed from theshareholdings and assets were transferred. In relation to this, Section 174 of Company governsduty of directors. They should provide relevant skills, abilities to effectively promote firm andattain efficiency in business operations (Schewe and Lipsens, 2018). One of director of ABC Ltdwhich was Bob had been removed on insufficient grounds that profits were reduced. Thus, Alanand Cassy are in breach of duty as they do not scrutinise main cause behind lower profits andremoved Bob. The case of John Shaw & Sons Ltd V Shaw is relevant in this aspect and as such,other directors are in breach of duty as they do not perform due care, diligence to effectivelymaintain business operations and incurred losses. Moreover, without conclusive proof, they canbe held liable under Act as Bob was removed without any evidence from the company1.2 Providing remedies available to Bob in terms of Companies Act 2006There are various remedies that are available to Bob under the Act and as such, he can getfair judgement in the best possible manner (Bull, 2018). First one is derivative action which is aneffective and equitable remedy to the party. In relation to this, court can easily exercise itsdiscretion and take into account claimant's viewpoints, motives by which he has opted for sueand as such, judgement can be provided. Another remedy is unfair prejudice remedy whichimplies that Bob can file petition on grounds of organisation's affairs and unfair prejudicial tointerest of company's members. In relation to this, case ofEbrahimi V Westbourne Galleries canbe linked to the case of Bob and as such, remedy can be attained in a better way. Next remedy is1
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