I would say the best approach is to set out as many of the consequences as you can think of and then identify in simple terms what are the effects.
So legal actions might be along the lines: Legal actions Once formed the company has the ability to sue and be sued in its own name. There are two sides to this: one is that the company alone is the proper plaintiff for wrongs done to the company. This is the rule in Foss v Harbottle. The other side is that the proper defendant for wrongs done by the company is the company. A director or member should not in general terms be liable for the wrongs of the company (although of course there are circumstances in which each may be liable. For instance, directors may be liable for reckless or fraudulent trading; members may be liable to contribute to the debts of the company in the amount of the unpaid share capital in a winding up). The advantage for the corporators is that they ought not generally be liable for the debts of the company. This allows an element of entrepreneurial risk without personal liability: of course this is not available to partners in a partnership or sole traders. John Freeman Westland Law www.lawgrinds.ie -----Original Message----- From: [email protected] [mailto:[email protected]] On Behalf Of tiger Sent: 24 March 2009 14:25 To: FE-1 Study Group Subject: Company law - Consequences of Incorporation Hi all Just wondering if anyone else is confused about the questions on consequences of incorporation. In the examiner's reports, answers discussing separate legal personality in too much detail were criticised. I do not have much in my notes on the other consequences- limited liability, transferability of shares, perpetual succession, large membership, taxation, legal actions and statutory obligations. I would only be able to write one line or two for each of them. Anyone else finding the same problem? Thanks --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups "FE-1 Study Group" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [email protected] For more options, visit this group at http://groups.google.ie/group/FE-1-Study-Group?hl=en-GB -~----------~----~----~----~------~----~------~--~---
