The Law of Business Organisations encompasses the legal framework and regulations governing the formation, operation, governance, and dissolution of various types of organisations. These organisations can include corporations, partnerships, limited liability companies (LLCs), and other business entities. Here are the topics you will learn in this module.
Common Law
Common law refers to the body of law developed by judges through court decisions and precedents, rather than through legislation. It is based on principles established in previous court cases and is an important source of law in many common law jurisdictions, including England and Wales.
Sources of Law
The sources of law include legislation (statutes and acts passed by the legislature), common law, legal principles, judicial decisions, and legal customs. These sources collectively form the legal framework that governs organisations and their activities.
Courts of England and Wales
The court system of England and Wales comprises different levels of courts, including the Supreme Court, Court of Appeal, High Court, and various lower courts. These courts hear and decide legal disputes, including those involving organisations, interpreting and applying the law.
Contract Law
Contract law governs agreements and legal relationships between parties. It sets out the rules for the formation, interpretation, and enforcement of contracts. Contract law is crucial for organisations as it regulates their commercial transactions, obligations, and rights with other parties.
Business Organisations
Business organisations are entities formed for the purpose of conducting business activities. They include sole proprietorships, partnerships, and companies. The choice of organisational structure impacts factors such as liability, taxation, ownership, and management.
Sole Proprietorship
A sole proprietorship is the simplest form of business organization where a single individual owns and operates the business. The proprietor has unlimited personal liability for the debts and obligations of the business.
Partnership
A partnership is a business organization where two or more individuals or entities agree to carry on a business together. Partnerships can be general partnerships (with shared liability) or limited partnerships (with both general and limited partners).
Company
A company is a legal entity separate from its owners. It can be formed as a private company or a public company and has its own legal rights and obligations. Companies are subject to specific laws and regulations, including those related to incorporation, governance, and reporting.
Legal Personality
Legal personality refers to the recognition of an entity as a separate legal entity that can own property, enter into contracts, sue, and be sued. Companies, both private and public, have legal personality, while other forms of business organisations, such as sole proprietorships and partnerships, do not.
Veil of Incorporation
The veil of incorporation refers to the legal separation between a company and its shareholders. It protects shareholders from being personally liable for the company's debts and obligations. However, under certain circumstances, the court may "pierce the veil" and hold shareholders personally liable if they have abused the corporate structure.
Company Formation
Company formation involves the process of creating and registering a company with the relevant government authorities. It typically includes selecting a business name, filing necessary documents, defining the company's structure, and complying with legal requirements.
Majority Shareholders
Majority shareholders are individuals or entities that hold a majority of shares in a company. They often have significant control over the company's decision-making process and can influence important matters, such as electing directors and approving major transactions.
Directors
Directors are individuals appointed or elected to manage and oversee the affairs of a company on behalf of the shareholders. They have fiduciary duties to act in the best interests of the company, exercise reasonable care and skill, avoid conflicts of interest, and promote the success of the company.
Minority Shareholders
Minority shareholders are individuals or entities that hold a minority of shares in a company. They typically have less control over company decisions and may have specific legal protections to safeguard their rights and interests.
Insolvency
Insolvency refers to a financial situation where an organization is unable to pay its debts as they become due. It is an important aspect of the law of organisations as it deals with the legal framework and procedures for addressing financial distress. Insolvency law provides mechanisms for the orderly resolution of debts and the distribution of assets to creditors.
The specifics of common law, sources of law, company formation, and other topics related to the law of organisations can vary between jurisdictions. It is advisable to consult the relevant laws and seek legal advice specific to the jurisdiction in question.
Use our highly acclaimed Law of Organisations notes to smash this module now.
