Historical Development Of Incorporation Law

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.

Constitutional provisions mandating general incorporation laws became widespread in the north in the 1840s and spread through the rest of the country in the 1870s, one of the most famous general incorporation laws, the New York Free Banking law of 1838. The New York case provides a fascinating example of how states solved the problem of corruption and corporations. General incorporation laws made corporate charters available to everyone who met minimum requirements through an administrative procedure. In contrast, special incorporation required an act of the state legislature. Special and general incorporation will be discussed in detail later. Special and general incorporation are representative of the more general process of special and general

Tomasic, R. Jackson, J. & Woellner, R. (2002). Corporations Law: Principles, Policy and Process. 4th ed. Sydney: Butterworths

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

For this task I have been asked to describe the legal and financial aspects that will affect start-up of the business

Moreover, LLC’s offer many of the advantages of both the closely held forms of business (Sole Proprietorship, Partnerships, and limited partnerships) and those of the corporate forms of business. Most notable; reduced personal liability, relative simplicity to form and reduced regulatory operation burden to the owners. Following are the key reasons that our founding members have chosen to incorporate as an LLC:

A) One of the disadvantages of incorporating a business is that the owners then become subject to liabilities in the event the firm goes bankrupt.

This is the most common type of company and is what most people have in mind when considering whether or not to set up a company. Each shareholder’s liability is limited to the amount unpaid on the shareholding owned by them. However, the shareholder must also be aware that they run the risk of losing monies paid to the company whether in full or part payment of the shares owned by them.

When starting a new business, it is very important to decide the form of legal entity which may be appropriate based on a number of factors. The legal entity can be sole proprietorship, partnerships (general and limited liability partnerships), limited liability companies, or corporations. One of the most important factors to consider when deciding the appropriate form of legal business entity is complexity. If one has limited capital and wishes to start a simple business unit, then sole proprietorship is the most appropriate. The second factor is the need for protection from the risk of liabilities. If the new business operates in a volatile industry where it is possible to experience huge financial losses, then a limited liability company or partnership can be considered appropriate. The ease of formation is another factor. It is easy to form a sole proprietorship as opposed to other forms of businesses. The issue of taxation may also influence the form of business entity that a person or group of people may choose. The aim is always to minimize tax as much as possible. According to Chiappinelli (2006), another important factor that should always be considered is the ease with which capital can be raised. It is easier to raise capital in limited liability companies or in corporations than it is in sole proprietorship.

If I start a new business in future, I will use the name with my last name "Luitel's Corporation". My business will be the family based business where every member would be able to work in a team. After searching business name, the Secretary of State website allows us to file a form. There are lots of option of selection regarding businesses such as non-profit, profit oriented, limited liability and more. The selection process goes through entity name, Article of Incorporation, and more. I have selected profit corporation because my goal of operating any business is to earn money. I have selected profit organization. The secretary of State helped us to incorporate any business in legally. Most of the people things commencing a business is a lengthy process. After going through all the process I realized we can start business

“Suppose that a company, thinking its incorporation has taken place when in fact it hasn’t met all requirements, starts up its business. What then?” (Warner, et al., 2012, p. 683).   The “what then” is when a court decides that a corporation de facto has been formed if three requirements have been met. When this occurs, the state has the power to force the company to correct the step or fix the prerequisite that was not met previously. The Legal Information Institute de facto corporation as

During this 21st century, we find that almost every nation has companies set up and these institutions play a major role in the nation’s economy. We can find that new companies are being incorporated almost in a daily basis under the Companies Commission of Malaysia, in accordance with Companies Act 1965(The Act). However, we realised that the concept of separate legal entity derived its mere foundation from Salamon v. Salamon & Co Ltd which dates back to several centuries.

As with any kind of business formation, there will always be, to some extent, negative aspects associated with the creation. To this date there is no perfect form of business entity. When deciding on which entity is best suited for a business, there are many things to be considered. Prior to deciding on a business structure, some major points to be thought about are both the legal and tax ramifications associated with the entity chosen. Another criteria that should be considered are the costs connected with the entity type. These cost include the cost of formation as well as any continuing administrative cost that may be incurred. (“Choose Your Business,” 2011)

When a company is incorporated it is treated as a separate legal entity distinct from its promoters, directors, members, and employees, which confers the benefit of not being responsible for the companies debt on the members on the company. However even though a company is a separate legal entity and it attains the advantage of not laying the responsibility of company’s debt on the

The current fast moving environment has impacted almost every aspect of doing business. Today, incorporation when starting a business has become a very sensitive matter that greatly influences the effectiveness and success of any business. In Griffin’s view for instance, among its positive impacts is that it can provide business owners with limited personal liabilities and credibility in the eyes of customers (Griffin, 2011). Today, the two most common options entrepreneurs have when it comes to incorporating their businesses are the S Corporation and the C Corporation. According to Brouwer (2011), the effectiveness of either of these options depends on the size of the business and the objective of its