Power point presentation, Assignments of Business Ethics

Download Power point presentation and more Assignments Business Ethics in PDF only on Docsity! UK INSOLVENCY LAW United Kingdom insolvency law regulates companies in the United Kingdom which are unable to repay their debts. While UK bankruptcy law concerns the rules for natural persons, the term insolvency is generally used for corporations formed under the Companies Act 2006. The main sources of law include the Insolvency Act 1986, the Insolvency Rules 1986, the Company Director Disqualification Act 1986, the Employment Rights Act 1996. Part XII, the Insolvency Regulation (EC) 1346/2000 and case law. Numerous other Acts, statutory instruments and cases relating to labour, banking, property and conflicts of laws also shape the subject. Corporate insolvency Corporate insolvencies happen because companies become excessively indebted. Under UK law, a company is a separate legal person from the people who have invested money and labour into it, and it mediates a series of interest groups. Invariably the shareholders, directors and employees' liability is limited to the amount of their investment, so against commercial creditors they can lose no more than the money they paid for shares, or debts. It held that a member cannot be prevented by a company constitution from bringing a winding up petition. It is, however, possible for a member to make a shareholder agreement and thus contract out of the right to bring a winding up petition outside of the company. JUDGMENT Lord Lindley MR held that the member was entitled to do so. He said ‘these registered limited companies are incorporated on certain conditions; they continue to exist on certain conditions; and they are liable to be dissolved on certain conditions.’ He pointed to the predecessors of IA 1986 sections 122 and sections 124 and said they set out circumstance when a company can be dissolved by the court and who can petition. A member could not be restricted.[1] “ I will begin by reading the following passage from the speech of Lord Macnaghten in Welton v Saffery [1897] AC 324: “These companies are the creature of statute, and by the statute to which they owe their being they must be bound in regard to shareholders as well as in regard to creditors in all matters coming within the conditions of the memorandum ” of association. Shareholders in these companies require protection just as much as creditors—perhaps even more; shareholders are not partners for all purposes; they have not all the rights of partners; they have practically no voice in the management of the concern. Their security in a great measure depends on the directors adhering to the requirements of the Act.” Any one who is familiar with the Companies Acts knows perfectly well that these registered limited companies are incorporated on certain conditions; they continue to exist not be terminated under the circumstances, or on the application of the persons, mentioned in the Act is to say that it is formed contrary to the provisions of the Act, and upon conditions which the Court is bound to ignore. The view taken by Byrne J. was right, and the appeal must be dismissed. Chitty LJ and Vaughan Williams LJ concurred. Lord Davey said: ‘Of course, individual shareholders may deal with their own interests by contract in such way as they may think fit. But such contracts, whether made by all or some only of the shareholders, would create personal obligations, or an exceptio personalis against themselves only, and would not become a regulation of the company, or be binding on the transferees of the parties to it, or upon new or non-assenting shareholders.’