...Corporate Liquidation vs. Dissolution Keith Williams Instructor: Jackie Russell Advanced Federal Taxation – ACC 317 February 5, 2012 Abstract Corporate Liquidation vs. Dissolution Keith Williams The purpose of this research paper is to answer the following questions: 1. Discuss the differences between a corporation that is liquidated and one that is dissolved. 2. Analyze how assets are dealt with in both situations. 3. Analyze how shareholders are treated in both situations. Every entrepreneur who starts a business must first decide which form of business organization will be most appropriate for their new endeavor. “Business enterprises customarily take one of three forms: individual proprietorships, partnerships, or limited-liability companies (or corporations)” (Business organization, 2011). In making this decision, entrepreneur’s need to consider a number of factors such as the ease of creation, the liability of the owners, tax considerations, the need for capital, and the business form. Traditionally, entrepreneurs’ have created one of the three major business forms which are the sole proprietorship, the partnership, and the corporation. Most large businesses that employ hundreds or thousands of workers are corporations. Furthermore, a corporation is an artificial being, existing only in state and/or federal law and is neither tangible nor visible. It is a business that has the legal status of an individual but is owned collectively by...
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...PARTNERSHIP ( It is a CONTRACT whereby two or more persons (1) bind themselves to CONTRIBUTE money, property, or industry to a COMMON FUND (2) with the intention of dividing the PROFITS among themselves or in order to EXERCISE a PROFESSION ( a STATUS and a FIDUCIARY RELATION subsisting between persons carrying on a business in common with a view on profit CHARACTERISTICS OF THE CONTRACT OF PARTNERSHIP [C, C, L, I, AS, NP] 1. CONSENSUAL ( perfected by mere consent 2. CONTRIBUTION of money, property or industry to a COMMON FUND 3. object must be a LAWFUL one 4. INTENTION of DIVIDING the PROFIT among the PARTNERS 5. “AFFECTIO SOCIETATIS” ( the desire to formulate an ACTIVE UNION, with people among whom there exist a mutual CONFIDENCE and TRUSTS 6. NEW PERSONALITY ( the object must be for profit and not merely for the common enjoyment otherwise only a co-ownership has been formed. HOWEVER, pecuniary profit need not be the only aim, it is enough that it is the principal purpose BUSINESS TRUSTS ( when certain persons entrust their property or money to others who will manage the same for the former RULES ON CAPACITY TO BECOME A PARTNER 1. a person capacitated to enter into contractual relations may become a partner 2. an UNEMANCIPATED MINOR CANNOT become a partner UNLESS his parent or guardian consents 3. a MARRIED WOMAN, cannot contribute conjugal funds as her contribution to the partnership UNLESS...
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...Page 1 of 19 PARTNERSHIP It is a CONTRACT whereby two or more persons (1) bind themselves to CONTRIBUTE money, property, or industry to a COMMON FUND (2) with the intention of dividing the PROFITS among themselves or in order to EXERCISE a PROFESSION a STATUS and a FIDUCIARY RELATION subsisting between persons carrying on a business in common with a view on profit CHARACTERISTICS OF THE CONTRACT OF PARTNERSHIP [C, C, L, I, AS, NP] 1. CONSENSUAL perfected by mere consent 2. CONTRIBUTION of money, property or industry to a COMMON FUND 3. object must be a LAWFUL one 4. INTENTION of DIVIDING the PROFIT among the PARTNERS 5. “AFFECTIO SOCIETATIS” the desire to formulate an ACTIVE UNION, with people among whom there exist a mutual CONFIDENCE and TRUSTS 6. NEW PERSONALITY the object must be for profit and not merely for the common enjoyment otherwise only a co-ownership has been formed. HOWEVER, pecuniary profit need not be the only aim, it is enough that it is the principal purpose BUSINESS TRUSTS when certain persons entrust their property or money to others who will manage the same for the former RULES ON CAPACITY TO BECOME A PARTNER 1. a person capacitated to enter into contractual relations may become a partner 2. an UNEMANCIPATED MINOR CANNOT become a partner UNLESS his parent or guardian consents 3. a MARRIED WOMAN, cannot contribute conjugal funds as her contribution to the partnership UNLESS she is permitted to do so by her husband...
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...compulsory questions each worth 10 marks consisting of: • 7 factual questions (knowledge) • 3 scenario based questions (application). Exam approach – scenario based questions • Follow ISAC approach: Identify the legal issues State the relevant law Apply the law Conclude Core Areas of Syllabus • • • • Essential elements of the legal system The law of obligations Employment law The formation and constitution of business organisations Capital and the financing of companies Management, administration and regulation of companies Legal implications of companies in difficulty or in crisis Governance and ethical issues relating to business • • • • Chapter 1 The English legal system The English legal system • Criminal law vs Civil law The main English civil courts • • • • House of Lords Court of Appeal County Court High Court of Justice Other courts • • • • Magistrates’ Court Employment Appeal Tribunal European Court of Justice European Court of Human Rights Chapter 2 Sources of English law Sources of English Law Case law Common law Legislation Direct legislation Indirect legislation Equity Sources of English Law • Literal rule • Golden rule • Mischief rule Chapter 3 Human rights Human Rights Act 1998 Purpose Derogation Human Rights Act 1998 Convention law Incompatible with convention Chapter 4 Formation of contracts Definition of contract A valid contract is a legally binding agreement...
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...Business Associations Outline 1. Agency a. Creating the Agency Relationship i. agent and principal enter into an agreement (not required to be in writing....no K required) in which the agent acts on the principal’s behalf in entering K’s etc…. 1. if done within the scope of the agency (enter into K, etc…) anything done by the agent is binding on the principal 1. principal may be liable in K, tort, property, etc…. (Vicarious liability) ii. question of agency is a factual matter to be determined as a “matter of fact” b. Res 3d Agency 1.01 (definition of “Agency”) i. Agency relationship created when (First Question to ask when dealing with agency) 1. The principal manifests assent to have the agent act on the principal’s behalf and under the principal’s control; and 2. The agent manifests assent or otherwise consents so to act 1. When agency exists the principles of attribution bind’s the principals to agents dealings with third parties 2. manifestation need not be by words (spoken or written), it may be created by conduct/actions i. Agent rx believes that Principal has manifested assent, and has rx accepted ii. (Notes….Legal Consequences of Agency) 1. Inward Looking Consequences: relate to the relationship between the principal and the agent and are largely governed by the contracts between the parties and by the law of fiduciary duties 2. Outward Looking Consequences: relates to the relationship among the principal, the agent, and a third party and are governed...
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...Introduction The following investigative document presents an overview of the textile industries in two emerging countries: Guatemala and India. The document analyses, compares and contrast the differences in the institutional structures of both countries and offers specific details and analysis of the textile industries for local and international businesses. Guatemala Republic of Guatemala is located in Central America bordered by Mexico to the North, the Pacific Ocean to the southwest, and Belize to the North East Honduras and El Salvador to the southeast. The country is mountainous with small desert and sand dune patches, having many hills filled with people, except for the south coastal area and the vast northern lowlands of Petén department. Two mountain chains enter Guatemala from west to east, dividing the country into three major regions: the highlands, where the mountains are located; the Pacific coast, south of the mountains; and the Petén region, north of the mountains. All major cities are located in the highlands and Pacific coast regions; by comparison, Petén is sparsely populated. These three regions vary in climate, elevation, and landscape, providing dramatic contrasts between hot and humid tropical lowlands and colder and drier highland peaks. Volcán Tajumulco, at 4,220 meters, is the highest point in the Central American states. Demographics Guatemala is a country of youth; 70% of its population is less than thirty years old. The capital...
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...MASENO UNIVERSITY ABA 302:- COMPANY LAW WINDING UP DAVE LUNG’AHO SIGANGA This is the legal process by which a company’s legal existence is brought to an end. It is carried through by a person known as a liquidator who wraps up the company operations by taking control of the Company, collecting the company’s assets, pays the Company’s debts, and then distributes the surplus among the members of the company. The liquidation process involves inter alia; A] Settling the list of contributories B] Collecting the company’s assets; C] Paying the company’s debts and other liabilities D] Distributing the surplus assets among other contributories Priority of Payment 1. Liquidators/ official receivers fees 2. Expenses incurred by the liquidator/ official receiver 3. Petitioner’s expenses 4. Preferential debts 5. Unsecured Creditors 6. Repayment of share capital as per the Company’s Articles of Association 7. The residue will be distributed to the members of the Company Relevant Law The process of winding up is governed by the Company Act Chapter 486 Section 212 [1] provides that the winding up may be either; A] A compulsory winding up by the court or 1 B] A voluntary winding up, which may be either a member’s voluntary winding up, or a creditors voluntary winding up; or C] A winding up subject to the supervision of the High Court. Who may petition? a) The Company Itself: - The Company may by special resolution commence winding up proceedings. It is a Company decision to wind up, not a...
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...PART 1 (a) List out 5 legal differences between a company and partnership (10marks) A company is society or association of persons, in considerable number, interested in a common object, and uniting themselves for the prosecution of some commercial or industrial undertaking, or other legitimate business. (The Law Dictionary, n.d) While a partnership is a voluntary association of two or persons, who contribute money, property, time, care or skills, to carry on, as co-owners, a lawful business for profits and to share the profits and losses of the business. (Rizwan Ahmad, 8 May 2009) I. First is the dissolution. A company is dissolved by winding-up and liquidation which is a formal procedure. A partnership may be dissolved informally, for example by agreement of the partners. II. Second is the registration. The Partnership Act does not require the registration of the partnership with any authority. However, a partnership business must be registered with the Registrar of Businesses. While the company’s memorandum and articles of association are lodged with the Registrar of Companies (“ROC”) III. Third is the number of members. Private Limited Company shall have at least 2 members and maximum 50 members. But for a public company are at least 2 members with no limitation. Partnership firm shall have at least 2 members and maximum 20 members and for banking business, maximum 10 members excluding lawyer firm, accounting firm, and architectural. . IV...
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...financial condition was due to the fundamental unsoundness of its business or merely a temporary run in with bad luck. This lack of any real corporate rescue vehicle characterized the legal environment that prevailed under the regime of Act No. 1956 (otherwise known as the “Insolvency Law”) from the time of its enactment on 20 May 1909 until the early 1980s1. Act 1956 by itself introduced major changes to corporate law and removed the distinction in the Spanish system between “insolvency” and “bankruptcy.” Nonetheless, the Insolvency Law’s approach to corporate rescue was simply to provide a “solvent but illiquid” debtor temporary relief from payment of its debts while an “insolvent” corporation was forced to undertake a gradual and organized liquidation process2. The Insolvency Law of the Philippines is in fact a derivative of even older laws from other jurisdictions, such as the California Insolvency Law of 1895 and the American bankruptcy Act of 1867 [See Sun Life Assurance Co. of Canada v. Frank B Ingersoll, et. al.; GR No. 164758 (November 1921)] 2 1 The three main remedies under Act 1956 are: a) Petitions for the suspension of payments by an individual, sociedad or corporation under Section 2 of the Insolvency Law: Section 2. The debtor who, possessing sufficient property to cover all his debts, be it an individual person, be it a sociedad or corporation, foresees the...
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...Anastacio Teodoro v. Atty. Romeo Gonzales AC No. 6760 January 30, 2013 Facts: AnastacioTeodoro filed a complaint against Gonzales for allegedly intentionally committing forum shopping. Gonzales is the counsel of Araceli in two civil cases filed against Anastacio. The first involved the settlement of the estate of Manuela Teodoro and while the case was pending, Gonzales assisted in filing the subsequent case for Annulment of Document, Reconveyance and Damages without indicating the special proceeding earlier filed. According to Anastacio, this was a deliberate act of forum shopping made by Gonzales. Initially, the commissioner found that Gonzales was indeed guilty of forum shopping for the ruling in either case would result in res judicata over the other and that he instituted the subsequent case without indicating the pending case. The commissioner ruled that Gonzales violated Canon 1 of the code for he disregarded the SC circular prohibiting forum shopping.Hence, suspending him for 1 month. However, the board of Governors of the IBP reversed the Commissioner’s recommendation and dismissed the case. Issue: Whether Gonzales committed forum shopping and thereby violating the Code of Professional Responsibility? Held: Yes. The court held that the respondent was guilty of forum shopping. Lawyers should be reminded that their primary duty is to assist the courts in the administration of justice. Any conduct that tends to delay, impede or obstruct the administration...
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...California Law Review Volume 57 | Issue 1 Article 1 January 1969 The Legal Roles of Shareholders and Management in Modern Corporate Decisionmaking Melvin Aaron Eisenberg Follow this and additional works at: http://scholarship.law.berkeley.edu/californialawreview Recommended Citation Melvin Aaron Eisenberg, The Legal Roles of Shareholders and Management in Modern Corporate Decisionmaking, 57 Cal. L. Rev. 1 (1969). Available at: http://scholarship.law.berkeley.edu/californialawreview/vol57/iss1/1 This Article is brought to you for free and open access by the California Law Review at Berkeley Law Scholarship Repository. It has been accepted for inclusion in California Law Review by an authorized administrator of Berkeley Law Scholarship Repository. For more information, please contact jcera@law.berkeley.edu. California Law Review VOL. 57 JANUARY 1969 Copyright © 1969 by California Law Review, Inc. No. 1 The Legal Roles of Shareholders and Management in Modern Corporate Decisionmaking Melvin Aron Lisenberg* TABLE OF CONTENTS I A GENERAL THEORY ...... A. ... ............... 4 A NORMATIVE MODEL OF'VOTING RIGHTS IN PRIVATELY HELD CORPORATIONS ....... ................ A NORMATIVE MODEL OF VOTING RIGHTS IN PUBLICLY HELD ................ CORPORATIONS ....... 7 15 B. . ........ 1. Considerations of Public Policy .. (a) "Shareholder democracy ". . .. ........ ... . ......... (b) Client-group participation .. (c) Managerialism .......
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...FINANCIA MANAGEMENT NOTES TOPIC 1 SCOPE OF FINANCE FUNCTIONS The functions of Financial Manager can broadly be divided into two: The Routine functions and the Managerial Functions. Managerial Finance Functions Require skilful planning, control and execution of financial activities. There are four important managerial finance functions. These are: a) Investment of Long-term asset-mix decisions These decisions (also referred to as capital budgeting decisions) relates to the allocation of funds among investment projects. They refer to the firm’s decision to commit current funds to the purchase of fixed assets in expectation of future cash inflows from these projects. Investment proposals are evaluated in terms of both risk and expected return. Investment decisions also relates to recommitting funds when an old asset becomes less productive. This is referred to as replacement decision. b) Financing decisions Financing decision refers to the decision on the sources of funds to finance investment projects. The finance manager must decide the proportion of equity and debt. The mix of debt and equity affects the firm’s cost of financing as well as the financial risk. This will further be discussed under the risk return trade-off. c) Division of earnings decision The finance manager must decide whether the firm should distribute all profits to the shareholders, retain them, or distribute a portion and retain a portion. The earnings must also be distributed...
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...Statement of the Legal Problem The issue that needs to be resolved in this case is whether petitioner, Conrado Tan is liable, either jointly or severally with the Nationwide Steel Corporation, for the monetary award in favor of the respondents - Restituto Timbal, Jr. I. Legal Concepts relevant to the Case Source: Corporation Code of the Philippines (Batas Pambansa Blg. 68) TITLE III - BOARD OF DIRECTORS/TRUSTEES/OFFICERS SECTION 25. Corporate officers, quorum. Immediately after their election, the directors of a corporation must formally organize by the election of a president, who shall be a director, a treasurer who may or may not be a director, a secretary who shall be a resident and citizen of the Philippines, and such other officers as may be provided for in the by-laws. Any two (2) or more positions may be held concurrently by the same person, except that no one shall act as president and secretary or as president and treasurer at the same time. The directors or trustees and officers to be elected shall perform the duties enjoined on them by law and the by-laws of the corporation. Unless the articles of incorporation or the by-laws provide for a greater majority, a majority of the number of directors or trustees as fixed in the articles of incorporation shall constitute a quorum for the transaction of corporate business, and every decision of at least a majority of the directors or trustees present at a meeting...
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...Case: Antone VS Beronilla, G.R. No. 183824, December 8, 2010 Facts: On 12 March 2007, herein petitioner Myrna P. Antone executed an Affidavit-Complaint for Bigamy against Leo R. Beronilla before the Office of the City Prosecutor of Pasay City. She alleged that her marriage with respondent in 1978 had not yet been legally dissolved when the latter contracted a second marriage with one Cecile Maguillo in 1991. Issue: Whether the trial court erred in finding that the first essential element of bigamy, which is a first valid marriage contracted by private respondent is wanting. Arguments: Petitioner: Petitioner maintained that the respondent committed an act which has all the essential requisites of bigamy. The prosecution pointed out that the marriage of petitioner and respondent on 18 November 1978 has not yet been severed when he contracted a second marriage on 16 February 1991, for which reason, bigamy has already been committed before the court declared the first marriage null and void on 27 April 2007 Respondent: Respondent moved to quash the Information on the ground that the facts charged do not constitute an offense. He informed the court that his marriage with petitioner was declared null and void by the Regional Trial Court, Branch 16, Naval, Biliran on 26 April 2007; that the decision became final and executory on 15 May 200[7]; and that such decree has already been registered with the Municipal Civil Registrar on 12 June 2007. He argued that since the...
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...INDEX S.NO. TOPIC INDIAN CONTRACT ACT Nature and Kind of Contracts Offer and Acceptance of an Offer Capacity of Parties and Consideration Void Agreement and Contingent Contract Performance of Contract Discharge of a Contract Remedies for Breach of Contract and Quasi-contract Agency PAGE 2-10 11-22 23-34 35-49 50-62 63-72 73-81 82-99 SALES OF GOODS ACT Sales of Goods Act CONSUMER PROTECTION ACT Consumer Protection Act NEGOTIABLE INSTRUMENT ACT Negotiable Instrument Act THE PARTNERSHIP LAW The Partnership Law THE COMPANIES ACT 1956 & COMPANIES LAW 2013 Companies Act 1956: Types of Company and Its Characters 101-127 129-140 142-167 169-191 193-211 Companies Act 1956: Memorandum, Article of Association and 212-239 Prospectus Companies Act 1956: Share Capital Companies Act 1956: Meeting Companies Act 1956: Management of the Company Companies Act 2013 240-275 276-302 303-340 341-364 THE CYBER LAW 2000 & AMENDMENTS IN 2008 CASES 0 MODULE-1 INDIAN CONTRACT ACT 1872 Chapters 1. Nature and Kind of Contracts 2. Offer and Acceptance of an Offer 3. Capacity of Parties and Consideration 4. Void Agreement and Contingent Contract 5. Performance of Contract 6. Discharge of a Contract 7. Remedies for Breach of Contract and Quasi-contract 8. Agency 1 The Indian Contract Act 1872: Nature and Kind of Contracts Learning Objectives In this chapter, students will come to know What is an agreement and a contract? What are the essential...
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