COMPANIES ACT 2006

Companies Act 2006



Companies Act 2006- Problem Question Analysis

Introduction

The new Companies Act preserves the integrity of the whole range of varieties of companies that can be created in the UK. First of all, companies are divided into a limited liability company and an unlimited company. Responsibility of the participants may be limited or shares, or a guarantee of participants. Furthermore, the company can either be private or public. It the company is public, it is reflected in the registration certificate. For a private company the minimum capital is not set, but for the public is 50 thousand pounds. Private limited companies can be identified by the word “limited” or abbreviation “ltd”, at the end of their name. In the UK, it is also possible to create different kinds of partnerships, but they are not governed by the Companies Act (Keay, 2007, pp. 276-280). In this paper, we have discussed the company law in relation to the case study. Furthermore, the paper discusses the breach of part 10 Companies Act 2006 with respect to the problem question.

Discussion

Situation Analysis

Peter breached the companies act 2006 part 10 with the investment in VHS recorders. The case can be analysed as the decision of Peter to invest in DVD plus ltd. was his personal step. He was not required to inform Meg and Stewie since he made investment with his personal money. Moreover, he is not liable to share the profit realised from that business. Since, the law clearly states that the deal the company cannot be challenged on the basis of the restrictions contained in the statutes of the company. Moreover, the transaction with a bona fide third party cannot be challenged on the basis of limitation of powers of directors, under the charter. In essence, the rejection of the objectives of the company specifies in its documents marks the final rejection of British lawmakers from the traditional doctrine that is intended to limit the capacity of its constituent documents (Chin, n.d.).

On the other hand, the decision of Peter to make investment in production of VHS recorder without the consent of other board members was a breach of law. Since the law states that ultimate authority lies with the company's members, who may also be referred to the shareholders in the case of a company with a share capital (Stimpson & Ors v Southern Landlords Association [2009] EWHC 2072 (Ch). They have the authority to change the statute (a special resolution, that is, a majority of 75%), the displacement of Directors, and other solutions may be taken as a general meeting or by signing each participant a written resolution without convening a general meeting. In this case, Peter holds the 70% ownership in the company, which makes the decision as a breach of company Act 2006. Since if he would hold 75% ownership only then he had the right to make decision without conveying any general meeting (Keay, 2007, pp. 276-280).

Since, in accordance with the general ideology of British company ...