We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Nobody downloaded yet

The Company Law for Accounts - Essay Example

Comments (1) Cite this document
Summary
From the discussion in the essay "The Company Law for Accounts," it is clear that a promoter of a company has many duties including disclosure of any profits made during the promotion of the company. This means that one must not make any secret profit without disclosing it if he is a promoter…
Download paper
GRAB THE BEST PAPER
The Company Law for Accounts
Read TextPreview

Extract of sample
The Company Law for Accounts

In case a promoter makes a profit secretly, the company may commence a legal action for rescission or recovery of the profits made secretly. This promoter is assumed to have executed without utmost good faith. This means that disclosure of their activities is the most important issue and they must work within the objectives of the promoters and must use their skills knowledge for the best of the firm (Siddharthacadey, 2010).
A promoter is any person involved in the planning to incorporate or initiate a running of a company, other than persons involved in a purely professional capacity. A promoter need not necessarily be the main person behind the incorporation, but he must have some executive function. The stereotype of a company and sells his business to it is a promoter.
A promoter has a fiduciary duty to the company he is forming and this requires him to disclose all profits he makes during the promotion of the company...
The courts have established the principle that a promoter stands in a fiduciary relationship with the company, which he is forming. This does not mean that he is barred from making a profit out of the promotion. It means that any profit made must be disclosed to the company. Breach of promoters’ duty If a promoter makes a profit and fails to disclose he breaches his duty of fiduciary. In the event of non- disclosure of profits the company may commence proceedings for rescission or for recovery of the undisclosed profits. The case study The case at hand is that Candy received a gift that he did not disclose to the other promoters. Therefore, he should be compelled to rescind the property to the company. The law prohibits individuals from unjustly enriching themselves at the expense of other partners. The other party should be compensated adequately to act as consideration. However, it should be noted that not all instances that parties are required to make compensated. In the case of unformed company the promoter is required to disclose rather compensate. In contract law, the pre-incorporation contracts are not enforceable, but the benefit accruing from it is disclosable. Being the fiduciary person Candy had certain legal obligations to fulfil towards the beneficiary. However, the very moment the Candy has taken a wrong approach of lying company, the bond of fiduciary relationship has been violated. This was confirmed in the case of Gluckstein v Barnes [1900]. In the case promoters had made profits before incorporation but they failed to disclose this fact. In their case, they misrepresented facts in prospectus that they were to buy a property at certain amount which they were unable to raise. ... Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“The Company Law for Accounts Essay Example | Topics and Well Written Essays - 2250 words”, n.d.)
Retrieved from https://studentshare.net/finance-accounting/2640-company-law-for-accounts-a-promoter-of-a-company-pre-incorporation-contracts-change-of-company-name
(The Company Law for Accounts Essay Example | Topics and Well Written Essays - 2250 Words)
https://studentshare.net/finance-accounting/2640-company-law-for-accounts-a-promoter-of-a-company-pre-incorporation-contracts-change-of-company-name.
“The Company Law for Accounts Essay Example | Topics and Well Written Essays - 2250 Words”, n.d. https://studentshare.net/finance-accounting/2640-company-law-for-accounts-a-promoter-of-a-company-pre-incorporation-contracts-change-of-company-name.
  • Cited: 0 times
Comments (1)
Click to create a comment
hw
hwehner added comment 3 days ago
Student rated this paper as
This essay was always my weak point. I could never finish it on time. Still, after I found this particular document, I understood how it should be done. So, I performed my research afterward and completed the essay in several hours, instead of months as it was previously.
CHECK THESE SAMPLES - THEY ALSO FIT YOUR TOPIC
Company Law
The statutes under this law are predominantly a culmination of acts of the legislature and judicial precedents. Notably, the law has undergone phenomenal alteration to suit the changing business environment. Company law does not only govern companies but also other corporate entities.
10 Pages(2500 words)Coursework
Company law
A partnership exits and operates under the guidance of the Partnership Act of 1890 and/or any other partnership agreement made by the partners (HM Revenue &Customs, 2011). In the case of Foster, Peart and Hope Architects, there is the existence of joint ownership of the premises as well as the partnership deed.
9 Pages(2250 words)Assignment
Understanding company accounts and reports: Mothercare
Mothercare was founded in 1961 and continues to grow locally and worldwide, with total sales increasing by 16.3 per cent during last year and retail space by 20 per cent. International sales now represent around 50 per cent of total network sales.
9 Pages(2250 words)Essay
Company law
Discussion The type and class of a company that will suit Mac Stevenson is a small no liability company. The no liability company is a company where the members have no liability to pay in case of its winding up. A no liability company must be a mining company with a company constitution stating its mining objectives1.
6 Pages(1500 words)Essay
Company Law
This paper seeks to perform an IRAC analysis of fraudulent phoenix activity, whereby the issue, rule, analysis, and conclusion will be made. Issue Australian corporate law has always sought to reinforce commercial and entrepreneurial risk taking, since these are essential to the creation of wealth, as well as the continuous functioning of the market (Adams, 2012).
6 Pages(1500 words)Essay
Company Law
However, debts are minutely covered by legislation and contract law is used. In respect of debt, its cost is easy to establish that the interest rate that is charged for the loan. The rate is determined by commercial factors which include the security offered, the amount that is borrowed, the duration of the loan and the creditworthiness of the borrower.
9 Pages(2250 words)Essay
Company law
It is particularly owing to the fact that the extension of the case led to the foundation of the Salomon principles in relation to Company Law related statutes. The principle, in simple terms, implies that the company has been legally incorporated and accordingly it should be considered as an independent person with certain specific rights along with liabilities to guide its operations.
10 Pages(2500 words)Essay
Understanding Company Accounts and reports
In addition, it help the organizations becomes more profitable, more productive and more sustainable. By adopting the environmental accounting and reporting
12 Pages(3000 words)Essay
Company Law
Directors then are the people who owe their service to the company or organization for the benefit of the members. They form the principle organ of management for any organization and carryout the major
8 Pages(2000 words)Essay
Company law
Freeman and Lockyer v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480 is a case where the court used this law and the court argued that the firm was bound by the acts of the single director. This means that with regard to the fact the three
9 Pages(2250 words)Case Study
Let us find you another Essay on topic The Company Law for Accounts for FREE!
Contact us:
+16312120006
Contact Us Now
FREE Mobile Apps:
  • About StudentShare
  • Testimonials
  • FAQ
  • Blog
  • Free Essays
  • New Essays
  • Essays
  • The Newest Essay Topics
  • Index samples by all dates
Join us:
Contact Us