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Company Law and Secretarial Practise

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They have a constitution that is legally binding but are managed by a management committee. All members of the committee are personally liable for the business unless indemnified by the constitution (Bartschi, 2001). On the other hand, a partnership is a comparatively simple way in which two or more individuals unite to operate a business To generate profits. The partners share the legal responsibilities of the business and are regulated by binding agreement concerning capital contribution, and the way they share profits and losses of the enterprise. Since partnerships are not incorporated, their borrowing is limited and due to the lack of equity, the business cannot issue shares.A limited company is the standard legal form of incorporated business. Incorporation of firms confers on them the aspect of the separate legal entity. The separate legal personality of integrated companies implies that they can enter into contracts in their name. Members of a limited liability company are not personally liable for the losses or claims laid on the business by parties such as lenders or customers. In limited liability companies, each member holds at least one corporate share and they are only bound to lose their company investment in case the business is liquidated due to insolvency or some other reasons (Bartschi, 2001). A company can borrow bank loans to supplement returns on share capital and the returns on investments. In securing bank loans, the companies use the assets that it owns as a collateral security. Therefore, due to the aspect of limited liability, bank lenders have to make it a requirement that businesses incorporate before they can secure bank loans. Accountability in limited liability companies is bestowed upon the company shareholders.Limited liability companies protect its members from financial or any form of responsibility but it is disadvantageous when lenders fail to loan until the members sign away their limited liability. Signing off a limited liability by company members makes them personally responsible for the business debts. The name of a corporation differs from its legal obligations. A legally constituted business must end with the legal elements such as Limited, Incorporated or Corporation (Bartschi, 2001). In a corporation, a business may decide to undertake transactions under a name that is different from the company name. In this case, the proprietor handles the
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preview essay on Company Law and Secretarial Practise
  • Pages: 6 (1500 words)
  • Document Type: Essay
  • Subject: Law
  • Level: Undergraduate
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