Posted: September 9th, 2022

Explain and compare the difference between a limited partnership

All solutions ought to confer with applicable authorized authority i.e. related laws and case regulation and could be supported with applicable reference to related secondary sources

every mini reply for Part A) needs to be round 265 words-

Be certain every reply is of broadly equal size and present reference to main regulation (statute and case regulation) in Help of your solutions. All questions carry equal marks. Reply THREE (three) questions solely in Part A)

(a) Explain and compare the difference between a limited partnership underneath the Limited Partnership Act 1907 and the Limited Legal responsibility Partnership Act 2000 on the problem of legal responsibility solely. Give reference to main regulation (statute, case regulation) to Help your reply.

(b) Explain the difference between how the Firms Act 2006 regulates enterprise names and how the regulation of passing off supplies a authorized foundation for disputes regarding enterprise names. Give reference to statute and main regulation (statute, case regulation) to Help your reply.

(c) To what extent do you agree or disagree that pre-incorporation contracts needs to be averted? Give reference to main regulation (statute, case regulation) to Help your reply.

Part B)

Question Assignment four

Reply BOTH (a) and (b). In doing so, reply half (a) and then apply the rules mentioned there partly (b).
(a) Explain the steps required concerning for a firm to problem its personal shares, pay dividends to shareholders and re-acquiring its personal shares. (50 marks)
AND
(b) Shiny Tech Co Plc have been buying and selling since 2016. The corporate has proved profitable in the different authorized providers market. While the firm administrators are all extremely skilled in know-how, none of them are certified attorneys. For the final two years the administrators invested in bitcoin and paid an additional, bonus dividend to all the firm’s shareholders. Nevertheless, it has now come to the administrators’ consideration that every one of the firm’s bitcoin belongings are very low in worth. The additional, bonus dividend funds shouldn’t have been paid out as the firm had no income. As quickly as they realise this, the firm administrators resolve to accumulate a few of the firm’s personal shares again. Advise Shiny Tech Co Plc and the shareholders. (50 marks).

Question Assignment 5
Reply BOTH (a) and (b). In doing so, reply half (a) and then apply the rules mentioned there partly (b).
(a) Compare and distinction the benefits and disadvantages of the statutory by-product motion (ss.265-269 Firms Act 2006) with the unfair prejudice petition (ss.994-999 Firms Act 2006), from the perspective of defending the pursuits of members of a firm. (50 marks).
AND
(b) Bonnie Tartan Plc provides wool clothes. Nevertheless, a group of minority shareholders of Bonnie Tartan Plc will not be pleased with current board choices. The board of administrators agreed to contract with Luxe Laine Sarl, a French limited firm, to import French wool from France at a considerably larger value per kilogram compared to the market value for Scottish wool. This contract brought about the firm important losses. One in every of Bonnie Tartan’s administrators is a shadow director of Luxe Laine Sarl and negotiated the contract to import the French wool. To Help the firm throughout the pandemic, in 2021 the administrators of Bonnie Tartan agreed to allot extra shares of the firm, which had the impact of diluting the minority shareholding additional. Continued over web page/
Continued from earlier web page/
5
The group of minority shareholders have been advised by one other agency of solicitors that the price of authorized proceedings could be a lot higher than the worth of any authorized declare they may have as members.
Advise the minority shareholders of Bonnie Tartan Plc of any rights and treatments obtainable to them. (50 marks).
Whole 100 marks. Finish of Paper

Regulation Questions

Title
Course
Tutor
Metropolis and State
Date
Part A
(a) Explain and compare the difference between a limited partnership underneath the Limited Partnership Act 1907 and the Limited Legal responsibility Partnership Act 2000 on the problem of legal responsibility solely.
The Limited Partnership underneath the Limited Partnership Act 1907 will not be a separate authorized persona from its companions. All of the common companions on this partnership have limitless legal responsibility whereas all limited companions have limited legal responsibility (Division for Enterprise, Vitality & Industrial Technique, 2018, 14). The Limited companions are mandated to contribute capital or property to the limited partnership. The limited companions don’t become involved in the administration of the limited partnership and if one will get concerned in the energetic administration, they lose their limited legal responsibility standing.
Conversely, the limited legal responsibility partnership underneath the Limited Legal responsibility Partnership Act 2000 is taken into account a separate authorized entity from its members. Thus, the members of this LLP is not going to be answerable for the money owed and obligations to the extent of their stake in the entity. Members are additionally not usually liable just by advantage of being a member of the LLP or for the actions or defaults of the different members. The member’s belongings are shielded from monetary penalties of the common enterprise failures in the actions of different members or staff (Division for Enterprise, Vitality & Industrial Technique, 2018, 15). Nonetheless, a member shall be personally liable for his or her actions in sure circumstances particularly when the members will owe frequent regulation duties to the LLP for explicit circumstances. The second occasion is when the memert assumes or is deemed toi assume private legal responsibility to a shopper of the LLP almost about their actions.

(b) Explain the difference between how the Firms Act 2006 regulates enterprise names and how the regulation of passing off supplies a authorized foundation for disputes regarding enterprise names.
The Firms Act 2006 offered authorized tips associated to firm names, particularly the limits on the alternative of firm title, the procedures adopted whereas making adjustments to a firm title, the buying and selling disclosures and the regulation of enterprise names. Notably, the Firms Home is allowed to reject the utility to register a explicit firm title. These circumstances embody when the proposed title is much like an current title in the public register except the cother firm has given its consent. The second occasion is when the registration would represent an offense or is offensive. The Firm’s Home on behalf of the Secretary of State wants to provide formal approval previous to registering a title which will counsel a reference to authorities or a public vacation or a public authority or which incorporates a delicate phrase particular in the laws.
Contemplating the regulation of passing off underneath the Firms Act 2006, any particular person may object to a corporation’s registered title on the foundation that it’s much like a title with which the objector has goodwill (Epoq Group Ltd, 2022). The objections should be made by utility by utility of the firm nam,es. Nonetheless, the applicant might want to show that they’ve good will on the title as demonstrated in the Erwen Warnink B V v J Townend & Sons (Hull) Ltd [1979] AC 731 (Regulation Explorer, 2016). Lord Fraser famous that the claimant must show that they’ve good will which may have been broken by the misrepresentations. Good will refers to the enterprise attributes that may appeal to and retain clients which aren’t accounted for elsewhere.
(c) To what extent do you agree or disagree that pre-incorporation contracts needs to be averted?
Pre-incorporation contracts as per Part 51 of the Firms Act 2006 have been outlined as the contractual agreements presupposed to be made by or on behalf of a firm that has not been included at the time of signing (Saracens Solicitors, 2017). The promoter is to be held personally answerable for this contract which was evident in the Royal Mail Estates v Maples Teesdale [2015] EWHC 1890 (Ch) (Saracens Solicitors, 2017). The court docket famous dangers related to getting into into a pre-incorporation contract which primarily included the proven fact that the occasion signing or getting into into the settlement on behalf of the firm needs to be sure that the topic firm is validly included and it has remained so previous to the settlement being made.
Thus, it will be advisable that the pre-incorporation contracts are absolutely averted except they’re absolutely conscious of the threshold for being lined by the exclusion phrase “any settlement to the opposite,” underneath s.51 of the Firms Act 2006. With out a correct exclusion of Part 51, the brokers or the signatories performing on behalf of this firm are risking being personally answerable for any obligations. It’s important that one obtains authorized recommendation which incorporates verifying if the firm purporting to enter the settlement has in reality been included.
Part B
Question Assignment four
(a) Explain the steps required for a firm to problem its personal shares, pay dividends to shareholders and re-acquiring its personal shares.
The Firms Act 2013 prescribes three steps to be adopted in the problem of latest shares beginning with the problem of the prospectus. The prospectus entails inviting the public to subscribe to the firm’s shares. It incorporates all info referring to the firm together with its monetary construction, the previous years’ steadiness sheets, the revenue and loss statements amongst others (Toppr, 2022). It is going to state the method by which capital is to be collected. The second step is the receipt of purposes from potential buyers, the buyers fill out the utility then deposit the required utility monet in the scheduled financial institution. The ap[plication process stays open for a maximum of 120 days and this time lapses without the minimum subscription being reached, then the issue of shares gets canceled. The application money needs to be refunded to the investors within 130 days since the issue of the prospectus (Toppr, 2022). The third step is the allotment of shares once the minimum subscription has been attained. Since there is normally an oversubscription of share, the allotment follows the pro-rata basis. The allotment letters are sent to those that have been allotted their shares. This leads to having a valid contractual agreement between the company and the applicant who becomes a part owner of the company. Letters of regent are sent to the applicants if the applications are rejected.
The steps to be followed in regards to a company paying its dividends to its shareholders starts with directors verifying several issues. These include the fact that the intended dividends are covered by the balance of realized profits in the last annual accounts that are circulated to shareholders, that the realized profits have not been consequently lis, the dividends payment may not leave the company bata position it cannot pay its debts and if the company is to be audited, the legal requirements that apply to the auditor’s report have been qualified (ICAEW, 2022). Then the company’s articles of association will set out the process for paying dividends for instance as per article 30 of the UK’s model articles for private companies limited by shares. The “final” dividends are normally on an annual basis after approval of the annual accounts. The Articles and Model Articles will normally provide the directors to recommend the dividen, the dividend to be declared by ordinary resolution and that the members could vote to pay more than the amount recommended by the directors (ICAEW, 2022). The articles and model Articles could also permit the directors to pay “interim” dividends at any time. Appropriate records relating to the payments of dividends should be kept such as the evidence of the dividend through the relevant accounts and minutes of directors’ or shareholders’ meetings.
Considering the CA 2006, the company seeking to buy back its shares could do so depending on whether it is an off-market purchase or a market purchase. The market purchase entails the purchase of shares on the Stock Exchange. It needs authorization by ordinary resolution which gives it the general authority of purchasing the company’s own shares. It could also be limited to shares of a specific class or description. The authority could be unconditional or conditional and it will not last over 18 months. The standard practice in many PLCs is having this resolution passed during their AGM. For the off market purchase, it starts with obtaining approval from the shareholders, then the buyback contractual agreement is made between the company and the shareholders whose shares are to be bought (Clark, 2022). A resolution of the shareholders is needed for approving the buyback contract. If the company is to carryout the buyback for the purpose or in pursuant to the employees scheme, several the shares will need to be paid after purchase or installments, having a simplified process in which the capital to be bought back involves a special resolution supported by the solvency statement and for the general authority to be granted in advance should specify the date in which it is to expire, this should not be in any case later than 5 years after the date in which the resolution is passed (Clark, 2022).
(b) Shiny Tech Co Plc have been trading since 2016. The company has proved successful in the alternative legal services market. Whilst the company directors are all highly experienced in technology, none of them are qualified lawyers. For the last two years the directors invested in bitcoin and paid an extra bonus dividend to all the company’s shareholders. However, it has now come to the directors’ attention that all of the company’s bitcoin assets are very low in value. The extra bonus dividend payments should not have been paid out as the company had no profits. As soon as they realize this, the company directors resolve to acquire some of the company’s own shares back. Advise Shiny Tech Co Plc and the shareholders.
For the Shiny Tech Co Plc, the buyback of shares will start by approving that the company would repurchase the shares at any price which is ascertained by the Articles of Association. The company’s articles should not restrict or prohibit this repurchase through a written contract or a written memorandum of the main terms. The right shareholders’ resolution will indeed have to be passed for the procedure to proceed. The shareholder resolution relies on whether the buyback is for the purposes or in pursuit of an employees’ share scheme or not (Gannons Solicitors, 2022). Considering that this buyback is not for the purposes or in pursuant to the employees’ share scheme, the purchase contract terms need to be authorized by ordinary resolution of the shareholders. Over 50% of the votes need to be in favor of the resolution but the shareholders to be brought back should not exercise the votes attached to these shares.
After the shareholder approval, there needs to be enough distributable reserves for funding the share buyback. If the Plc is not to pay from the distributable reserves, liabilities could arise. These include the fact that the directors can be held liable for acting in breach of their duties, other shareholders could attack the company share buyback transaction and void the contract and finally the HMRC could deny beneficial tax treatment for the shareholder.after the approval, then the filings with HMRC for stamp duty and Companies House are to be done. The transactions are then funded and all the remaining shareholders need to receive an uplift.
Question 5
(a) Compare and contrast the advantages and disadvantages of the statutory derivative action (ss.265-269 Companies Act 2006) with the unfair prejudice petition (ss.994-999 Companies Act 2006), from the perspective of protecting the interests of members of a company.
The statutory derivative action entails a claim being made by shareholders relating to a cause of action vested in the specific company where the shareholder intends on attaining relief on behalf of the other shareholders in this company regardless of its size (DocPro Legal, 2021). In Burland v. Earle, the court noted that if an entity has the right of action against a director and can use their stance to stop the specific company from taking action, the court would then allow a shareholder to instigate a derivative action on a company that has been heir having been negligent or has breached its duty or trust.. Its advantage is that a company’s shareholder is now allowed to make a claim on behalf of their company if their intention is bringing a bona fide action for benefitting this company if there are no alternative remedies. Its disadvantage is that the claimants cannot have a larger right to relief than the actual company, if it were a plaintiff representing its own interests. The claimant can also not make a complaint relating to specific activities validity in case the majority shareholders approve to the minority’s detriment. Thus, for the cases with minority shareholders maintaining an action are limited to solely where the activities being complained about are considered to either be fraudulent or beyond the given company’s powers. Subsequently, any damages or property received incurred from the process having been instigated will then be taken by the particular company even when the shareholder that brought the action in the circumstances will most likely be obligated to pay the costs incurred.
The unfair prejudice petition is a statutory remedy where a minority shareholder that is a victim of ‘unfairly prejudicial’ conduct could obtain relief from the court (DocPro Legal, 2021). In this claim, every given shareholder of a company is contractually bound to every other shareholder so as to then be bound by the majority shareholders decisions otherwise their companies would fail to function effectively. This remedy has been found to be considerably less problematic if the companies under consideration themselves are smaller such that those affected just choose to walk away. Thus, it is evident that the proper claimant is the company itself so the general rule favors an exclusion of an individual shareholder pursuing such an action. The CA 2006 at section 994 now provides that a shareholder that requires redress prefers making a claim under the unfair prejudice rather than instigating a derivative action under the CA 2006 at Part 11.
(b) Bonnie Tartan Plc supplies wool clothing. However, a group of minority shareholders of Bonnie Tartan Plc are not happy with recent board decisions. The board of directors agreed to contract with Luxe Laine Sarl, a French limited company, to import French wool from France at a significantly higher price per kilogram in comparison to the market price for Scottish wool. This contract caused the company significant losses. One of Bonnie Tartan’s directors is a shadow director of Luxe Laine Sarl and negotiated the contract to import the French wool. To help the company during the pandemic, in 2021 the directors of Bonnie Tartan agreed to allot more shares of the company, which had the effect of diluting the minority shareholding further. The group of minority shareholders have been told by another firm of solicitors that the cost of legal proceedings would be much greater than the value of any legal claim they might have as members. Advise the minority shareholders of Bonnie Tartan Plc of any rights and remedies available to them.
Minority shareholders can depend on different kinds of contractual or legal remedies to address wrongdoing by the company’s controllers. In this case, the main statutory remedy that will aid these minority shareholders is the unfair prejudice petition. This remedy gives the court wide discretion of granting relief if any company shareholder could prove the entity’s affairs were unfair and prejudicial towards them. The minority shareholders at Bonnie Tartan Plc will need to prove that one of the company’s directors was a shadow director of Luxe Laine Sarl which had a great impact on the contract negotiations. The possible orders that the court will make include requiring the company to refrain from or continuing with the contract, and imposing regulations on the company’s future conduct.

Reference list
Clark, O., 2022. Buyback of Shares. [online] Ouryclark.com. Accessible at: [Accessed 5 May 2022].
Division for Enterprise, Vitality & Industrial Technique, 2018. Limited Partnerships:
DocPro Authorized, 2021. Tips on how to Shield Minority Shareholder Rights (with Examples)? | DocPro. [online] DocPro. Accessible at: [Accessed 5 May 2022].
Epoq Group Ltd, 2022. Passing off | MyLawyer. [online] Mylawyer.co.uk. Accessible at: [Accessed 5 May 2022].
Gannons Solicitors, 2022. Firm share buyback – Gannons Solicitors. [online] Gannons Solicitors. Accessible at: [Accessed 5 May 2022].
ICAEW, 2022. Paying dividends the necessities. [online] Icaew.com. Accessible at: [Accessed 5 May 2022].
Regulation Explorer, 2016. COMPANY FORMATION AND LINKED ISSUES |. [online] Lawexplores.com. Accessible at: [Accessed 5 May 2022].
Reform Of Limited Partnership Regulation. Accessible at:
Saracens Solicitors, 2017. Ought to You Threat Signing A Pre-incorporation Contract? – Saracens Solicitors. [online] Saracens Solicitors. Accessible at: [Accessed 5 May 2022].
Toppr, 2022. Concern of Shares – Fairness and Desire Shares. [online] Accessible at: [Accessed 5 May 2022].

Order | Check Discount

Tags: Explain and compare the difference between a limited partnership