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Partnership
A partnership is “the relation which subsists between persons carrying on a business in common with a view of
profit”: s1(1), Partnership Act 1890
Khan v Mia 2000 (HL): Partnership could be formed before the business actually began to trade
Don King v Warren 1999: partnership property belongs to the partnership as a whole, i
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all of the
partners
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Mercantile Credit Co v Garrod 1962 -“what was apparent to the outside world” (apparent authority)

Company
‘plc’: s58 Companies Act 2006
‘Limited’ or ‘Ltd’: s59 Companies Act 2006
Sections53, 54, 69 CA 2006 – prohibited names
Part 2, s9 CA 2006 – registration of company
Salomon v Salomon & Co Ltd 1897 (HL) – separate legal personality & limited liability
Macaura v Northern Assurance Ltd 1925 (HL) – company’s property belongs to the company, not
shareholders
Adams v Cape Industries plc 1991 (CA) – Veil of incorporation
Plc: the authorised minimum nominal value of the issued shares of a public company is £50,000 or the
prescribed Euro equivalent (s
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At common law a company may not pay a dividend out of capital - Re Exchange Banking Co, Flitcroft’s Case
(1882)
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Procedures are governed by the Companies Act (CA) 2006 and Articles of Association
CA 2006 s
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22 – Entrenched provision of articles
Voting: the number of votes cast, either by a show of hands, or on a poll, determines the result
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Hence the majority vote is a simple or qualified majority
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Resolution
Required

Ordinary
> 50% of the votes cast
s282 CA 2006

Notice

14 days notice is required for general meetings
21 days notice is required for AGMs of public companies
28 days special notice is required in some circumstances e
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removal of director/auditor
The notice of the meeting
written resolutions may only
must include the text of any
be passed by a private
special resolution and specify company
that it is to be moved as a
A copy of the resolution must
special resolution
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the default position i
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for
required for
All decisions except
any business for which a
-Change of name
Removal of a director (CA
special resolution is not
-Change of nature of company 2006 s168) or auditor (s510)
specifically required by
-Alteration of the Articles
before expiry of term of
enactment or the Articles
-Reduction of share capital
office
-Petition for compulsory
winding up of the company
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Decisions

Other

Special
75% or more of votes cast
s283 CA 2006

Written
Ordinary resolution in
writing = >50% of all
members entitled to vote
Special resolution in writing
= 75% of all members entitled
to vote

DIRECTORS DUTIES - Companies Act 2006 s171 – 177 (statutory duties)
REMEDIES:
Damages is the usual remedy available to the Company against the director in breach of duties owed
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171-173 & 175-177 are fiduciary duties for which equitable remedies may be available
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168 provides that a director may be removed from office at any time by ordinary resolution of
which special notice has been given by the person proposing it
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168 cannot be overridden by the articles or any service agreement, although the articles can provide for
weighted voting rights e
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“Bushell v
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Under Article 9 of the
company constitution directors’ shares were weighted and carried three votes each in the event when the
director was proposed to be removed
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HELD: the provision was valid and circumvented the CA s168
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Positive Life
The Company Articles stated that Mr
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The directors decided to use other
solicitors
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HELD: that the articles conferred no rights on a member where the member seeks to enforce rights in a
capacity other than a member
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SHARES
 Shares in a limited company must have a fixed nominal value (s
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542(2) CA 2006)
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/the interest of the shareholder in the company measured by a sum of money, for the
purposes of liability in the first place and of interest in the second, but also consisting of a series
of mutual covenants entered into by all the shareholders”
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 But common business practice: the term ‘debenture’ is extended to include the loan itself and it usually
designates a secured loan as opposed to an unsecured one
CHARGES AND WINDING UP
s860 CA 2006: Charge must be registered within 21 days of its creation
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175 Insolvency Act 1986: Preferential creditors’ order of priority
UK CORPORATE GOVERNANCE CODE 2014



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