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

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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.  Finally, the cases in Salomon v. Salomon Co. (1897) and Marcaura v Northern Assurance Co. Ltd help to evaluate the principle of personal succession which is the unique feature of being a company.  Across the paper, James is given recommendations to the type of company which best suits his needs.  

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a) Advantages of Incorporation

Incorporating a company offers James many advantages, even if he is doing one-person business.  Some of these advantages are:

 

  • Separate legal personality.  A corporation is by law recognized as a separate legal person.  Since a partner in a general partnership represents an agent of the business, when a change happens about partners, it in most times differentiates the partnership.  On the other hand, a ...

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