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This paper examines the type of corporation which meets James's best interest.

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Introduction

Contents Contents 1 Abstract 2 Introduction 3 a) Advantages of incorporation 4 Separate legal personality 4 Limited liability 5 Capital acquisition 5 Tax advantage 5 Credibility and prestige 5 b) Public or private company? 6 Differences between public and private company 7 Limited by guarantee 7 Unlimited company 7 c) 'Off the shelf' 8 d) Why assigning the benefits of insurance policy on the company's name? 8 Conclusion 9 Bibliographies 10 Abstract This paper examines the type of corporation which meets James's best interest. A company can be set up with or without shares available to the public, divided into the public company which is expensive to obtain and maintain, and the private company which is appreciated by most businesses to begin with. Also, there are limited and unlimited companies. In addition, a company can be classified as limited by guarantee or limited by capital shares which are in most companies' favour. These are governed in the main by the Companies Act 1985 and relevant case law. Introduction There are several types of company. The most common company is a limited company, the liability of the members being limited to the amount they have previously agreed. According to Denis Keenan (1996), a corporation is a succession or collection of persons having at law an existence, rights and duties, separate and distinct from those of the persons who are from time to time its members. This paper explains the reasons to form a company, and the reasons why a private company is more preferable than the public one, together with the discussion of the company limited by guarantee and unlimited company. ...read more.

Middle

However, it is true that it is an expensive and time-consuming process to incorporate as a public company which is required a good amount of legal, accounting and consulting documents to be done. Money does matter. The fee to incorporate as a private corporation is �20 although the subsequent costs of complying with the legislation on accounts, audit and disclosure may occupy some percentages of the total costs. However, the price to set up a public company is amount to millions. Professional advisors, such as, lawyers and accountants, are extensively involved in the going public process in order for the company to avoid costly errors, and protect the benefits of the public. Once the company listed in the stock market, it must retain professional advisors to meet the complex requirements of the regulatory securities regime. It also costs incredibly huge amount of money to deliver the company information to the existing and potential investors, by advertising or some other way. Moreover, the public companies face increasing reports and corporate governance, which may indicate that a portion of management's time and energy is taken up dealing with the regulatory documents and generating market interest overtime. Besides, the bureaucracy of the management team may be foreseeable, which would lead to the inefficiency of management. Conflict of interest may also arise which would damage the whole objective or achievement of the company. For example, a local junior manager may make decisions to meet the shop's best interest, based on the Return on Investment of the local shop. In doing so, he may reduce the company's overall Return on Investment. ...read more.

Conclusion

Conclusion In conclusion, this paper comes up with the evaluation of types of company to incorporate. James may adopt the suggestion to establish a private limited company by capital share. In order to obtain limited liability and perpetual succession, James is recommended to build up a body corporate. Then, it may not be a good idea to first incorporate a public company. Because it involves a very expensive process and James is short of money. To the third point, James is advised to an 'off the shelf' company to save time, investigation and money. Company Act 1985 states that a shareholder is permitted to change the contents of the article and memorandum by special resolutions. A quick company may be born and improved to best meet James's needs. It should be mentioned that the company is better to be limited by a capital share, as the limited by guarantee is not very keen on the profit-generating process. Bibliographies Books Andrew Hicks & S.H.Goo (2001) Cases & Materials on Company Law (4th ed.). London, Blackstone Press Limited. Denis Keenan (1996) Smith & Keenan's Company Law for Students (10th ed.). London, Pitman Publishing Geoffrey Morse (1999) Charlesworth &Morse Company Law (16th ed.) London: Sweet & Maxwell. Janet Dine (2001) Janet Dine Company Law (4th ed.). Palgrave Law Masters Paul L. Davies (2003) Gower and Davies Principles of Modern Company Law (7th ed.). London: Sweet & Maxwell. S. Kunalen & Susan Mckenzie (2001). Blackstone's Law Questions & Answers- Company Law (2nd ed.). London, Blackstone Press Limited. Stephen Mayson, Dereck French & Christopher Ryan (2000) Mayson French & Ryan on Company Law (17th ed.). London: Blackstone Press Limited. Web materials www.businesslink.gov.uk Note: 2495 words 03440034 1 Wanhua Cai ...read more.

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