Company Law Example - Corporate Law and Companies Act { 2022 }

Company Law

Types of companies Corporate Law

There are various classifications of companies Company laws that may be made.

1. Chartered Company Law

A Law company may be chartered, that's, set up by a charter from the Crown, and may then derive it is powered from the charter. The very first companies were of this variety, For example, the East India Company, the Massachusetts Bay Company, the Hudson’s Bay Company. Today, chartered companies aren't of economic significance but they still exist. 

Generally, they are not trading concerns. They may be professional organizations – the Institute of Chartered Accountants of United States and Wales is an example. They may be local govt corporations, for example, the Corporation of Chesterfield. Perhaps the most famous chartered company law of them all is the British Broadcasting Corporation.

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2. Statutory company Law

A further Kind of company Law is the statutory company. In Victorian England, there was a great plethora of incorporations. Every company had to be set up by a separate Act of Parliament. During this period of the industrial revolution, the great mass of companies involved public utilities such as gas and water, or transportation Like canal companies and railway companies. Today, there're few statutory companies. The process is too cumbersome for periods of Large economic activity, as each company Law is incorporated by a separate act of parliament.

3. Registered company Law

The third Kind of company in this classification is the most common of all. This is the registered company Law. Registered corporations originated with the Joint Stock Companies Act of 1844 when Gladstone was President of the Board of Trade. The current Companies Act under which registration may be sought by companies in the Companies Act of 1985. 

Provided a company Law complies with the formalities set out in the Act, it will be registered, that is, it is named will be added to the list of registered companies and a file will be opened in it is the name at Companies House in Cardiff. In fact, today, clearly a manual register isn't opened, the company’s registered details are kept on microfiche which is available for inspection at Cardiff and in London (and in Edinburgh for Scottish companies).

4. Limited and unlimited company Law

Another form of classification of companies is the distinction between a company limited by shares, a company limited by guarantee, a company limited by guarantee with share capital, and an unlimited company. Most companies are limited by shares. Trading companies will need to raise share capital with which to purchase assets that they need for running their businesses. Companies limited by guarantee are the media, usually utilized by charities including educational institutions such as the London School of Economics. 

Such companies don't need capital with which to trade but may wish to have some of the other advantages of incorporation such as the ability to hold property in their own name. Since the Companies Act 1980, it hasn't been possible to create new companies limited by guarantee with a share capital but there are some companies falling into this category that existed in 1980 and remain registered companies. 

If the company is an unlimited one, as has already been mentioned, there'll be no obligation to file annual accounts. However, this advantage must be balanced against the disadvantage that the members of the unlimited company will have unlimited liability and may be called upon to contribute to the company’s assets if the company goes into liquidation.

5. Public and private company Law

A fundamental distinction that pervades the whole of company law firms is the distinction between public and private companies. Most companies are private but more important larger companies are public companies. 

The basic distinction is that a public company may offer its shares and debentures to the public whilst it is a criminal offense for a private company to do so. See ss 143(3), 170, and 171(3) of the Financial Services Act 1986. A further distinction is the capital requirement first introduced in the Companies Act 1980 which requires that a public company Should have a minimum subscribed share capital of £50,000 (s 11 of the Companies Act 1985). 

This must be paid up to at least 25% so at least £12,500 must already have been raised by the issue of shares. A public company must furthermore have a trading certificate before it begins trading in addition to its certificate of incorporation (s 117 of the Companies Act 1985). This trading certificate will only be issued once the Registrar of Companies is satisfied that the company has satisfied the formalities of the Act and raised the required minimum capital.

The name of the company constitution will indicate whether the company is private or public. The description ‘public limited company or as abbreviated ‘plc’ (or Welsh equivalent ‘ccc’ and ‘Cwmni Cyhoeddus Cyfyngedig’) will indicate that the company is a public one. By contrast, if the company is expressed to be ‘limited’ or as abbreviated ‘It'd or ‘Cyfyngedig’ or as abbreviated ‘Cyf’, the company is a private company. If a company is registered as a public company this fact must be stated in its memorandum (s 25(1) of the businesses Act 1985). 

A private company law need not state what kind of company it is in its memorandum. There're various other distinctions between public and private companies. It suffices to mention a few at this stage. The company secretary of a public company needs to have a relevant qualification as set out in s 286 of the Companies Act 1985 (see para 17.4). 

There is no such requirement for the company secretary of a private company. A public company needs to have at least 2 members and two directors, by contrast, a private company now only needs one member and one director. There are various other distinctions that will be examined in this exposition of company law.

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