Classification of Company Status

2 This is an OPEN book examination. You can only use your prescribed text book and the Corporations Act 2001. No other materials are allowed.

The thesis deals with the above concepts and discusses how the Companies Act 71 of 2008 (the Act) modified the law, particularly, by extending the legal capacity of a company and extinguishing or modifying the above rules which had previously restricted a company's ability

Members are able to sell their shares at any time to another person without having to obtain permission from the other members.

(15) No consideration is to be provided for the issue or transfer of the securities (e.g. no monetary payments).

1. to preclude the company from trading out of its temporary insolvency, thus resulting in creditors not being fully paid in respect of their debt; and

8. An entity shall not classify a debt security as held-to-maturity if the entity has the intent to hold the security for only an indefinite period. Consequently, a debt security shall not, for example, be classified as held-to-maturity if the entity anticipates that the security would be available to be sold in response to what circumstances?

Limited Company – Organisations set up to run your business. They must adhere to legislation such as The Companies Act 2006. This act sets out duties the appointed director holds. For example, to ‘act within your power as a company director’. These businesses need to be registered with Companies House and must submit any important

Public companies are any company that has stock available to the public to buy. A company that wishes to set up a new business or expand its existing business can raise the capital it requires either by borrowing money or by issuing shares to investors. The

In addition (Chen-Wishart n.d), notes that a company is categorized as a legal personal and operates as distinct from its shareholders. Based on these statements, Betty had not right to act on behalf of Bechdo Pty Ltd and Bechdo has the capacity to sue Betty for acting contrary to the company constitution. Based on the case study, Betty had breach the contract which existed between her and the company laws. If an act carried is outside the objects for which the company was founded to as contained in the company’s memorandum of association which is this case is the company’s constitution, then the acts are deemed to be ultra vires. In other words, the acts are beyond the capacity of the organization. In addition, contracts which are deemed ultra vires are categorized as void (Palmiter 2009, p.59). This can be referenced to Ashbury Railway Carriage and Iron Co v Richie 1875. The doctrine of ultra vires which have deemed the contracts between Bechdo Pty Ltd and BB Ltd, Jillo Pty Ltd, and Con Development Ltd as void has been applied with the aim of protecting the interests of lenders and company shareholders. As noted by Chen-Wishart (n.d), ultra vires is necessary in protecting the interest of its shareholders who depend on objective clause of the constitution to limit the acts in which their money may be used.

b. all members of the board or compensation committee who approve compensation arrangements must not have a conflict of

The definition of company is 'A legal entity, by legislation, which permits groups of people, as shareholders, to apply to government for an independent organization to be created, which can then pursue set objectives ' (Duhaime, 2014).

The confidentiality and concerns of the company are addressed in a clear and concise manner. What the company expects or restricts is clearly defined in the work relationship, personal fees and commissions, service with outside organizations and conduct with competitors. Securities and investment are allowed to invest in company stock and their view on insider trading, violations and the response to outside requests for information concerning the companies’ finances.

Private equity is an asset class consisting of equity securities in operating companies that are not public trade on a stock exchange.

One person is completely liable for all debts and actions taken, with lot of his personal earnings linked to the firm, it makes it difficult for the outside investors to provide financial support by trusting owner’s capability to grow the firm and accuracy of his

Some of the main effects of the Companies Act on private companies are: an individual and simplified model of Articles of Association; individual requirements for accounting and reporting; no requirement for a company secretary; no requirement for an annual meeting; and simplified rules about share capital, (companieshouse.gov.uk, 2014). The key benefits of the Companies Act for shareholders