Commercial Law Essay

Trevor Vs Whitworth Company Essay
Question 1 1.The principle or rule known as the maintenance of share capital is based on the
need to protect shareholders and creditors. Share capital is the contribution made by shareholders
by subscribing shares of the company. A company's creditors can only look to the share capital
for the payment in the event of a winding up. To protect creditors, a general rule known as the rule
in Trevor v Whitworth was developed to prohibit a company from reducing its share capital
because a reduction in capital would prejudice the rights of creditors. Moreover, the reduction
would in effect diminish the pool of funds available to the company to pay its creditors. The rule in
Trevor v Whitworth has been incorporated into Ch 2J of the Corporations...show more content...
Section 259 B of the Corporations Act 2001 prohibits a company from taking security over its
shares or the shares of the company which controls it. Section 259C of the Corporations Act 2001
also provides that the issue or transfer of shares of a company to an entity it controls is void.
Besides, Section 256B(1) of the Corporations Act provides that a company may reduce its share
capital in a way that is not otherwise authorised by the Corporations Act if the reduction is fair
and reasonable to the company's members as a whole; and does not materially prejudice the
company's ability to pay its creditors; and is approved by members under Section 256C of the
Corporations Act 2001. Section 256C of the Corporations Act 2001 provided that a company may
reduce its capital if the reduction is fair and reasonable to the company's shareholders as a whole;
and does not materially prejudice the company's ability to pay its creditors; and is approved by
shareholders. 2.Many companies elect to issue shares of two classes–ordinary share and preference
share. However, there are differences between these two types of shares. Holders of ordinary shares
are part–owners of a company and may receive payments in cash, called dividends. Ordinary shares
will have the right to share equally in any dividends (if they are declared) with all other ordinary
shareholders after all other claimants have been paid. Besides, ordinary shares have the right
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ADR Essay
I. Introduction
With the economic globalization, international commerce develops rapidly. Conflicts in international
commerce are emerging endlessly. In this context, the different choices of procedures, which parties
of international commerce make, will bring different results. Compared with the domestic
commercial conflicts, the international commercial conflicts might have more various results.
Additionally, more than one states or regions involve in the international commercial conflicts, so
there normally are more than one regulations, authorities and customary laws which are applicable in
one case. Flexible Alternative Dispute Resolution (ADR) can give the parties the freedom to choose
the rules to resolve their conflicts. As a result, ADR becomes more and more widespread in
international commercial law.
To investigate the usage of ADR in the international commercial law, it is necessary to discuss the
definition of terms and the features of ADR in the international commercial law.
1.Definition of terms
1.1 Definition of 'International Commercial Law'
This term decides the differences between ADR in the international commercial law and in the
international law, and between ADR in the international commercial law and in the national
commercial law.
Different people and countries have different understandings about 'international'. Normally, there
are three methods to decide if a case is an international case or not.
Firstly, some states like the UK, Sweden and

Commercial Law
ABDUL RASHID ABDUL MAJID v ISLAND GOLF PROPERTIES SDN BHD [1989] 3 MLJ
376 ISSUE In this case, the issues is whether the board was entitled to levy and collect fees known
as development fees from members? PRINCIPLES The defendants owned, managed and operate a
social golf club. Membership of the club is of the following types which are honorary membership,
ordinary membership, ordinary transferable membership, subscribing membership, institutional
corporate membership, expatriate transferable membership, ordinary social membership, term
membership and visiting membership. Under the Rule 3 of the club's rules provided, inter alia, that
the club was a proprietary club, of which the defendants were the proprietors with a board of
directors...show more content...
The offer for membership came from the defendants after they had considered the plaintiff's
application. The contract between the plaintiff accepted the offer by making the payment of the
entrance fees and the first subscription. Therefore, the declaration in the application forms as not
part of the contract. It is just an antecedent communication. The only contract between the
plaintiff and the defendants was the rules of the club. The authority to levy fees must clearly be
given by the rules of the club and there was no such authority under the rules. Rule 33 clearly
made the board the sole authority for the interpretation of the rules and as it purported to oust the
court from their jurisdiction the rule was contrary to public policy and therefore void. 3|Page
CONCLUSION The conclusion for this case is the board was not entitled to levy and collect fees
known as development fees from members. For the interpretation of the rules, this is contrary to
public policy and therefore void. Thus, a declaration of intention or an invitation to treat, so, all
fees collected as development fees are repaid to the plaintiff and costs to be paid by the defendants.
Otherwise, the offer must be communicated to the offeree which under Section 9 of the Contract Act
1950 is the exercise of power by the offeree indicating his assent to the transaction in response to the
offer. The

Commercial Law Essay
Civil obligations to not injure our neighbours in New Zealand are dealt with by the use of tort
law (textbook). Negligence is the most significant of all tort law and is the relevant tort I will be
using to examine this case. This case involves David who is felling trees on a property, on the last
tree he was felling he careless and hurried to fell the last tree. As a result the tree fell on the
neighbouring property, demolishing the boundary fence, a shed wall, and furthermore causing
explosives in the shed to explode where the shed burns, as well as the garage next to it, where a
vintage care was parked which also burned.
The issue is whether David has been negligent in failing to carefully fell the trees and liable for the
demolishing of Connor's fence, shed, and garage, and Marcs car.
The specific laws and principles would relate to this case would be negligence with the elements of
duty of care, foreseeability, proximity, and causation.
For David to be negligent, all negligence elements must be met.(ref textbook 222)
First the defendant must owe a duty of care to the plaintiff.
Then a breach of that duty must be present, and finally a loss suffered by the plaintiff which was
caused by the breach of duty, all elements must be met otherwise the plaintiffs case will fail in court
Lord Aitken's proposition on duty of care contains two elements, the first is that the action or failure
to act on the part of the defendant was likely to cause harm; and that the plaintiff

Essay on LAW4198 Australian Commercial Law
LAW4198 Australian Commercial Law Exam Notes Formation of contracts 1. Agreement Offer
Offeror/promisor = person making the offer. Offeree/promisee = person to whom the offer is
made. Characteristics of an offer Offer: Proposal; Invites acceptance; With a willingness to enter
into a contract upon acceptance. An offeror will have made an offer where it appears to a
reasonable person in the position of the offeree that an offer was intended. Subjective intentions are
irrelevant. Examples Invitations to treat: An invitation to others to make offers or enter into
negotiations; Display of goods for sale (customers make an offer when they present the items to the
cashier. There is no sale until the cashier accepts that offer; Boots...show more content...
Electronic communication Email and Interactive websites i. Virtually instantaneous пѓ general rule
should apply (ie. contract is formed when the offeree's acceptance is received by the offeror; per
Lord Wilberforce in Brinkibon)4; ii. Time of receipt governed by Electronic Transactions Act
2000 (Vic): 'Electronic communication' = a communication of information in the form of data,
text or images (s 3(1)(a)). 'Information system' = a system for generating, sending, receiving,
storing or otherwise processing ECs (s 3(1)). If the recipient has designated5 an information
system for the purpose of receiving electronic communications, then, unless otherwise agreed, time
of receipt = time when the EC enters the IS (s 13(3)); If the recipient has not designated an
information system then, unless otherwise agreed, time of receipt = time when EC comes to the
attention of the addressee (s 13(4)). 2. Consideration Essential elements When is consideration
required? A's promise to B can only be enforced by B if B has given consideration for that promise;
An agreement not supported by consideration on both sides is nudum pactum ('a naked agreement')
and unenforceable. Elements 1. Benefit/detriment requirement; Promisee must incur a detriment or
confer a benefit on the promisor (Currie v Misa). Examples: Mutual promises: If B makes a
promise in return for A's promise, this will confer a benefit on A (because A will have an
enforceable legal right to have the promise

Commercial Law And International Trade Law Essay
I have chosen a career in commercial law due to several reasons.Firstly,I thoroughly enjoyed Law
of Contract in first year and am thoroughly enjoying Land Law and International Trade Law in
second year.I can see myself working in these and similar areas of law for the rest of my life.
Secondly,I have a keen interest in the business world.A career incommercial law will allow me to
work at the intersection of law and business.Crucially,I will get the chance to work on important
business deals and advise prestigious clients such as multinational companies and global
banks.Thirdly,I very much relished doing legal work during my internship at the Advocate General's
office.Although I did not undertake commercial legal work there, the experience convinced me that
life as a lawyer will be interesting and intellectually rewarding.
I believe there are several attributes a commercial lawyer must possess to be successful.Perhaps the
most significant is commercial awareness i.e. understanding and knowledge of the business
world.This attribute is necessary for commercial lawyers to be able to look at every issue from the
client's perspective;so that they are able to give legal advice that helps the client achieve its
goals.Among other things,commercial awareness usually means understanding,and being
up–to–date with,the client's business,the market in which it operates,the state of the economy,etc.To
boost my own commercial awareness,I read the book 'Commercial Awareness' by Christopher

Veil Of Incorporation Case
Table of Content 1. Part A 2.1 Veil of incorporations 2.2 Company Insolvency Trading 2. Part B 3.3
Company's insolvent 3.4 Director's breach duty 3.5 Duty of Care 3.6 Defenses and Consequences
3.7 Consequences and Penalties of breaching the duty 3. References
Part A
1.1 Veil of incorporation
According to the case, OHS Solutions Pty. Ltd. is a partnership company formed by three friends.
They are Des who expert in occupational health and safety, Emma who has accounting degree and
Satish who has an IT degree. In addition, Ying join as a director (non executive) and also as a
director of Support Pty. Ltd. as a guarantor for a $50,000 loan from the Business Bank Ltd. to OHS
...show more content...
It is still possible, albeit it in very limited circumstances for the veil of incorporation to be pierced so
that the parent company can have action brought against it for the conduct of its subsidiary.
Therefore, as the debt incurred the directors of the OHS Company have a responsibility to prevent
the company from the company insolvent. During the board of meeting, directors must attend the
meeting in order to get a decision preventing the company insolvent. Hence, Ying as a non–executive
director of OHS Solutions also must involve in board meeting. Des as a Managing director
responsible to manage and supervised the workflow of the company. Des failing to managed the
company and also the employee resulting to get more customers and gain more income.
The finance director, Emma, is failing to manage and supervised her employee. As a finance
director, Emma had a responsibility to manage the company's money. And also, she responsible to
oversee the company's income. In this case, OHS Solutions had an over due debt. Besides, she was
unable to find the record of financial information. She did not manage the work with the employee.
Satish as an executive director, did not held a board meeting before engage Trouble Shooters Pty.
Ltd. Satish failing to organise and manage the work with Trouble Shooters causing the dissatisfied
service.
Director non–executive Ying, as a guarantor of OHS Solution loan also

The legal principle on company law established by the case "Salomon v Salomon & Co Ltd" is
that a company upon incorporation is a body corporate which is recognized by law to have a
separate legal entity from its members and officers. The company and members are two separate
bodies. This is known as the veil of incorporation. Thus, the debts of the company cannot be
recovered from its members. For example, the debts of the company cannot be recovered from its
member. Rather than the director or its member, a company is normally liable for any breach by
itself. A company is an artificial legalperson that exists independently of the individuals who at any
given time are the members of the corporate body. In the case of Salomon V Salomon & Co Ltd,
even though Salomon managed the business solely by himself, yet in law Salomon and the company
is separate body as the company has incorporated.
As a legal entity by itself, company can:
1.Enjoy perpetual existence and has its own legal personality.
2.Has its own legal personality.
3.Is separate from its members and officers and the change of its members and officers does not
affect its legal personality.
4.Sue and be sued in its own name.
5.Deal with property itself.
6.Liable for its debts,...show more content...
According to section 16(6) of the Companies Act 1965, upon incorporation, the persons whose
names appear in the company's register of members from time to time shall be the members of the
company and together they shall be a body corporate. Under section 16(5) of the Companies Act
1965, the body corporate enjoys separate legal entity with an existence that does not depend on the
identity of its members and members of the company shall be liable to contribute to the assets of the
company in the event of being wound up. However, the liability of the members will depend on
whether the company is a limited company or an unlimited

Law Commission Essay
As a body the law commission is an independent, permanent and full time organisation where their
aim is to improve the law by making suggested changes and brings it up to date. The law
commission was created by the law commission act of 1965.
In the law commission there are five commissioners. There is one chairman/women who is a high
court judge and four others which can be either legal academics and/or practicing barristers who are
both trained to a high standard.
There are three ways that they try to modernise the law, by codification where they bring together a
particular topic to one act of parliament. Examples of this includes Draft Criminal Code Act 1989,
Murder and Homicide Act 2006 and the Coroners and Justice Act 2009. Consolidation...show more
content...
Where they will go through the same process as to the House of Commons, but, when they have
done the third reading the bill will go through the consideration of amendments. This is where the
house of lords makes any changes to the bill, then the bill has to go back to the house of commons
so they can approve it before it goes to the queen. However, if both houses cannot come to any
agreement, the house of commons will get the say, because they have more power than the house of
lords. Finally, the last stage is Royal Assent, where the crown formally assents to the bill in order for
it to become a law.
Orders in council are used for a range of different reasons for example transferring obligations
between government departments. The Queen and the privy council have authority to make orders
in council that affect the whole country. This way it doesn't have to go through government. The
privy council are a group of senior politicians. An example of this was the petrol strike in 2000.
This was when there was a fast moving protest about the price of petrol and deasil, this cause a panic
to the community about buying petrol from stations, so they tried to preserve fuel

Effects Of Contract Law On Society
Effects of Contract Law on Society As defined by The Law Dictionary, a contract is "an
agreement, upon sufficient consideration, to do or not to do a particular thing." (1) Basically,
contracts are promises that are enforceable by law. And, if one party does not keep his promise,
the law provides a remedy by the breaching party. In order for a contract to be enforceable by law,
the contract must include a valid offer, an acceptance of the offer, and adequate consideration.
Contacts are primarily governed by statutory and common law. Uniform Commercial Code The
Uniform Commercial Code (UCC), according to the website USLegal.com, "is a set of laws that
provide legal rules and regulations governing commercial or business dealings and transactions."
(2) The Uniform Commercial Code was published in 1952 but has seen several revisions since
that time. The UCC has been adopted by all states though it may not be exact among all states.
The UCC provides regulations for the sale of personal property and helps bring standardization to
business laws so there can be some standard of "uniformity amongst the states." (3) The UCC is
broken into nine articles that each addresses a different area of commercial law. Elements of a
Contract The three main elements of a contract are offer, acceptance, and consideration. Each
element must be present in order to have a legally binding contract. First, one party, the offeror,
makes a valid offer to another party, the offeree.

Business Law Questions and Answers
QUESTION 1. Issues of this case: Could the offer acceptence by e–mail be capable of creating
contractual relationships? Was there a breach of cotract? The matter of the case is regulated by
Contract Law. Contractual nature A contract can be difened as "an agreement containing
promises made between two or more parties with the intention of creating certain legal rights and
obligations and enfoufceable in a court of law". (Andy & Douglas, 2013, p.307). Though every
contract involves an agreement, not every agreement is legally forceable and will result in
contract. It is necessary to find out weather the agreement between parties was inteded to be
regarded by the law as valid and enfoceable (a contract) or just an agreement and not enforceable.
Definition also says that angreement first of all is a promise or commitment that something will or
not will happen in the fututre. However, to be a contract a promise must have a cantractual nature
and therefore a promosor must have legal liability. In the given case David (offeree) accepts offer
via e–mail which was not legally recorded or officially sealed unless Charlie (offeror) and David
had agreed to communicate electronically. Thus, may only be (hypothetically) a simple contract. A
simle contract must contain 3 constituents: 1.There must be an agreement between parties. In other
words, there must be a offer and acceptance. Charlie offers to sell his car to David, so it can be an
offer. David decides to buy Charlie`s car and

Uniform Commercial Code and Common Law Contracts
UCC and COMMON LAW CONTRACTS
Introduction Uniform Commercial Code (UCC) entails many underlying laws and requirements
governing it in trading within a country and internationally. The international trade part has in recent
years raises the question as to whether states should change the laws or not. The current laws can
bring about many issues causing the downfall of many large businesses. This makes it hard to
conclude on the effect of U.C.C. on international commerce coming along with many factors
depending on the side it leans more. Common law, on the other hand, is a legal system that involves
matters such as jury trials, and presumption of innocence. The term common law defines a legal
system commonly known as common law legal system (Smith, L., 2011). Various countries manage
the common law legal system since the English legal system models their legal system. The
common law legal system handles matters such as jury trials, and presumption of innocence. The
Uniform Commercial Code is a business law that provides delineation concerning the passage of the
title from the seller to the buyer.
Differences in UCC and Common Law Contracts Common law contract applies where there is a
binding agreement between two or more parties. The Uniform Commercial Code contract does not
involve private dealings between civilians. Contracts under the UCC involve gap filling provisions
where parties leave a gap in the contract while common law contract does not allow

Business Law and Ethics Essay
Business Law and ethics
Subject:
The objective of this report is to highlight the importance and need of ethics, ethical leadership and
organisation behaviour. The report is based on the speech of Michael Hackworth.
Leadership in fairness and honesty makes good business sense.
Organisation behaviours, culture, values, management style and ethics, all of them make a
combination on which company success and failure depends. Every company in the world start by
stating the mission, objectives, values, belief and structure. Every part of it influences each other. It
is very difficult to maintain balance between them.
Michael Hackworth express that top management some time ignore the ethics and ethical boundaries
which...show more content...
Normally companies and businessman's need a good quality business plan with good business
strategies in order to cope this starving market, also with ethics in order to be flourishing in this fast
growing world.
Are profits too high and exploiting the customer?
Now a day, every company is trying its level best to maximize its profit either by hook or crook.
And in reality it is the main agenda and goal of every company to maximize its profit. Otherwise,
there is no mean of doing any business. But the thing is either company are making and maximizing
their profits by adding value to its customers. Whatever they invest into the particular product, are
customer is getting the same value of their investments. But if we look around our surroundings then
those companies either it is industrialist, businessman and entrepreneur all are trying their level best
to maximize their profit and increase their wealth by exploiting their customers. However, consumer
of the product normally looking for extra and most excellent services in order to get better their own
working effectiveness by minimizing costs, decreasing capital investment and predetermined
spending. Exploitation of consumer from vendors is look like a never ending difficulty. There are
lots of ways to exploit a customer. Sometimes wholesalers and retailers charge a higher price then
mentioned price on the product. They give to their lesser quantity then

Corporate Law Essay
THE UNIVERSITY OF ADELAIDECOMMLAW 7011 CORPORATE LAW (M)
BUSINESS SCHOOL
Week 3, Semester 1, 2012
TUTORIAL QUESTIONS
WEEK 3 (Commencing Monday 12 March)
Acknowledgement: These Tutorial Questions were originally devised by Martin Markovic, Senior
Lecturer, Business School, University of Adelaide.
Question 1
A, B and C are long time friends from University days. They share common interests especially with
respect to making money. A is acomputer programmer for a bank, B is a chartered accountant and
C a corporate lawyer. While having drinks after work one evening in May, A indicated that he had
become disenchanted with the lack of challenge at his work. He...show more content...
In July, A, B and C entered into a joint venture agreement with D whereby:
(i)A, B and C were granted the sole distribution rights for the products in South Australia for a fee
of 20% of the annual net profits of A, B and C's business;
(ii)A, B and C agreed to comply with any marketing instructions issued by D;
(iii)A, B and C agreed to purchase all their computing products exclusively from D. This was most
unusual as all their competitors purchased products from a range of computing companies.
(iv)D had a right to inspect the business venture's books of accounts and a right to receive quarterly
statements.
In December, at a computing trade exhibition, A is overcome by an exciting range of new products
being offered by IBN Computers Ltd. He immediately attempted to phone B and C on his mobile
phone but was unsuccessful. A, being the impetuous person he was, couldn't wait and ordered
$250,000 of computing products from IBN.
Provide advice with respect to:
(i)the nature of the relationship between A, B and C;
(ii)the nature of the relationship between A, B and C and D;

(iii)The legal consequences of the $250,000 order with

Business Law Contracts Essay
LEGT 1710 Assignment 2 Introduction Harry (H) who is the father of James (J) is attempting to
sue J for a breach in contract and is seeking damages of $30,000 which he believes is the outstanding
amount that is owed to him by J. This case touches on the fundamental concepts of contract law
where H can only claim damages if the formation of a valid contract between the two parties is
evident via the elements of a contract, including intention, agreement, consideration, legal capacity,
genuine consent and legality of objects must be established. Once these elements are satisfied, the
terms of the contract need to be evaluated to deem whether the contract between H and J is
enforceable. Once it has been established that the contract is...show more content...
b) Agreement For there to be an agreement, the elements of offer and acceptance need to be
properly satisfied. H offers to deliver the timber for $90,000, which then becomes binding when J
accepts this offer by promising to pay the sum total of $90,000 for the timber, which is
unqualified acceptance (Lawbook, 2006, 7.1.370). The offer is communicated and accepted by
word of mouth (Felthouse v Bindley). Therefore it can be concluded that there is sufficient offer
and acceptance between H and J for tha agreed additional $30,000. c) Consideration Consideration
is the exchange of "something for something", or it must be the exchange of promises (Carter,
Peden and Tolhurst 2007). In this case, J asks for a supply of timber in return for the promise to
pay $60,000 as well as an extra $30,000. This consideration can be considered as good
consideration as the exchange of promises occurs after the verbal contract had been established,
unlike in Roscorla v Thomas which indicates past consideration, where consideration is made after
the act has been perfomed. This consideration is also adequate as set up by the precedent in
Chappell & Co Ltd v Nestle Co Ltd which shows that consideration must have some value, just
as the timber, and the promised $30,000 have some value and as both parties are seen to gain some
benefit from the exchange. However, it can be argued that there may be insufficiency of

The Latin principle of caveat emptor literally meaning let the buyer beware, has been followed for
many years by the English courts in the context of business transactions. Pre the industrial revolution
the action for breach of contractual rights needed a written warranty otherwise action could only be
brought on the grounds of fraud. The reasoning for such action was based on the manner in which
business was conducted, that is, namely at small fairs where buyers could inspect the goods and
haggle accordingly. This is evidenced in cases such as Chandelor v Lopus in which a plaintiff
brought an action against the defendant in relation to a Bezoar stone which was thought to have
medicinal properties. In this instance, the majority of the...show more content...
It was this mergence that saw Lord Mansfield becoming known as 'the founder of commercial law
within this country [United Kingdom]', due to his ability to harmonise 'commercial custom and the
common law ...with an almost complete understanding of the commercial community, and the
fundamental principles of the old law and that that marriage of idea proved acceptable to both
merchants and lawyers.' At this stage, the principle of caveat emptor was utilised as a guiding
principle for the courts, devised namely in response to the manner in which business at this time
was undertaken. This was in response to the manner in which business was conducted, namely in
small fairs with small quantities of goods being bought and sold, buyers were afforded the
opportunity to inspect the goods and use their own knowledge and skill to determine whether or not
to purchase them. As such, it was the buyer's responsibility to ensure that due diligence was
observed at the time of purchase. Failing to inspect the goods resulted in the cost would be lost if
the goods purchased were not what was wanted. In this context protection for buyers was to a certain
extent non–existent. The only way in which a seller could be held liable was in circumstances
where a written warranty was issued or if the case was considered to be one of false affirmation.
Cases of false affirmation occurred where the buyer was convinced to buy something by the false
statements of the seller;

Commercial Law
Question 1. Outline and describe the ways in which an Agency Contract may be established. Agency
According to Nicole Busby, an agency is a contractual relationships that entitles one party to act on
behalf, or in favour of, the other party in contractual arrangements with a third party. In this
regardthese circumstances, the former is known as an "agent" and the entity on whose behalf the
agent performs is called a "principal". Generally, the agency relationships arises in commercial
transactions, partnership and employment. The term "agency" in commercial law is represented in
the Latin phrase, qui facit per alium, facit per se, i.e. the one who acts through another, acts in his or
her own interests. In terms of agreeing an Agency...show more content...
2006, 6–12) Agency by ratification Ratification is the post–dated approval by a principal of an act
carried out by the agent. Such ratification may be express or may be established by the principal's
actings, in particular by accepting without demur the agent's actions. But the ratifying principal must
have the full facts before him and the agent must have made it clear to the third party that he was
acting as an agent (Keighley Maxstead & Co. V Durant 1901). Furthermore the ratification must be
timeous and the principal must have been legally capable of authorising the transactions or act when
the agent undertook it (Busby et al. 2006, 6–13). Are all conditions fulfilled we must notice that a
third party who contracts with an agent whose actings are subsequently ratified cannot withdraw
from the contract (Bolton Partners v Lambert 1889). Agency by necessity An agency by necessity
(negotiorum gestio – management of affairs) occurs when and where an agent does what is vital to
preserve a principal's assets, where the principal is not in a position to do so himself (e.g.
because the person cannot be contacted), and where it is likely that authority would have been
given. The agent (gestor) can get his expenses and be relieved of any liability (Fernie v Robertson
1871). "The agency by necessity is devoid of prior approval or consent when an

Company Law Exam with Answers
QUESTION 1 a. Define a promoter of a company. Explain and illustrate with decided cases his
legal position in relation to a company. Though the certificate of incorporation is conclusive for
purposes of incorporation, using decided cases, outline circumstances under which it could be
withdrawn.(10marks) ANSWER Definition; A promoter is one who undertakes to form a company
with reference to a given project and to set it going and who takes the necessary step to accomplish
that purpose – A promoter is not an agent of the company he promotes, as it does not exist yet. At
common law, he cannot be an agent of a non–existent principle. – A promoter is not a trustee of the
company in formation as it does not exist yet. – The English courts have...show more content...
When the charge chrysalises it fixes on the assets then owned by the company, catching any assets
acquired up to that date, but missing any which have already been disposed of. Explain the
similarities and differences between shares and debentures. (7marks) i. Similarities – A debenture is
usually one of a series or class, which is similar to a class of shares. – Debentures, as well, as shares
are long term investments in the company and re transferable in the same manner. – Debentures and
shares may be issued in the same way through a prospectus issue ii. Differences – A shareholder is a
member whereas a debenture holder is a creditor – A shareholder has an interest in the company but
not in the company's property. A debenture holder has no interest in the company but has an interest
in the company's property, which constitutes his security.– A shareholder can attend a meeting of
the company and vote at the meeting whereas a debenture holder cannot – A shareholder cannot
insure the company's property where as a debenture holder can. – Interest on debenture must be paid
even if the company doesn't not make a profit and can, therefore, be paid out of capital. Dividends
on share are payable only if profits are made and cannot be paid out of capital. – A company can
purchase its own debentures but cannot, as a general rule, purchase its own shares. – As a general
rule, share cannot be issued at a discount, where as debentures may be issued at a discount.

Disadvantages Of Separate Legal Entity
Introduction
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.
Characteristics of Separate Legal Entity
Salamon v. Salamon & Co. Ltd has a significance principle that has been recognised universally.
Refer to s16(5) in The Act, once company is registered, the new company is a juristic person that
separate from its members. Likewise, company has the full responsible on its own debts and
contractual...show more content...
Company reduces tax paying by splitting the income through imputing dividends: Hobart Bridge Co
Ltd v FCT .
Disadvantages of Separate Legal Entity Although doctrine of separate legal entity has the greatest
importance in company law, it contains weaknesses that could be arguable. Professor Kahn–Freund
described the doctrine as "calamitous" because it arise many issues, such as "How is it possible to
check the one–man company and other abuse of company law?" Separate legal entity is inadequate
for complex problems .
Due to limited liability, company creditors' interests are not protected . Creditors need to bear the
risks inherent when dealing with limited company. Shareholders are discouraged from monitoring
and controlling the business due to the benefits of limited liability.
Furthermore, the principle of separate legal entity provides an ideal vehicle of fraud . "$2
Company" is an example. The company was formed as limited company that undercapitalised.
Shareholders and directors are not liable for the large debts that the company incurred when the
company couldn't repay

Chinese Commercial Law Essay
Chinese Commercial Law (MLM 703) Trimester 3, 2008 ..... Assignment 1 Table Content: | | |tABLE
OF cONTENT....................................................................2 | |aBBRIVIATIONS USED IN
sTUDY................................................ 3 | |eXECUTIVE
sUMMARY............................................................... 4 |
|INTRODUCTION.......................................................................... 5...show more content...
24 | | | |REFERENCES.......................................................................... 25 | Abbreviations used in the
Assignment: MOFTEC ' Ministry of Foreign Trade and Economic Cooperation LCL ' Labour
Contract Law FDI ' Foreign Direct Investments PRC ' People's Republic of China SOE ' State
Owned Enterprises FIE ' Foreign Investment Enterprises NPC ' National People's Congress LSA '
Labour Security Administration SEZ ' Special Economic Zone ITC ' International Travel
Certificate MLSS ' Ministry of Labour and Social Security WTO ' World Trade Organization VAT
' Value Added Tax MOC ' Ministry of Commerce ACFTU ' All China Federation of Trade Unions
EU ' European Union NPC ' National People's Party Congress Executive Summary: China has been
one of the favourite places for the Foreign Investment for the last 40 years. Many Foreign Investors
have made Equity Joint Ventures in China to expand their business. From late 1970s, China granted
for the

Commercial Law Essay

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Commercial Law Essay