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Business Organisations and E-commerce (E - commerce (Cyberfraud and other…
Business Organisations and E-commerce
Types of business organisations
Sole proprietorship: one person,the person is the business
Partnerships: 2 or more people, below 20
Companies: one or more persons's doing business under a separate 'name'; people are called members or shareholders
Limited Liability Partnership: combination of partnerships and companies
Choice of business
How many people will be participating
How much risk
Formalities
Sole Proprietorships/ Partnerships
Must be registered under the BUSINESS NAMES REGISTRATION ACT 2014; W/O is an offence (Latest in ACRA business automatically dissolve upon death of SP or Partners + bankruptcy)
Companies: Popular choice, can set up online in ACRA website
Incorporation: process of setting up a company
Requirement : Requirement is contained in Section 27(1) of the companies Act
Persons who own business - shareholders + members
Persons who do actual running of business - Directors
at least 1 Singaporean & minimum age is 18*
Company continues forever until it is struck off the registered of companies by Registrar of Companies or wound up by Court
Can wound up itself: 75% agree
By others: Creditors
Types of companies
May be limited or unlimited
Limited: liability of members for the debts of the company is limited
Unlimited: members are liable for the debts of the company without limit (company = unlimited; cannot pay, wound up)
May be limited by shares (shareholders) or by guarantee (members)
Shareholders: In the event the company is wound up & owes creditors money, members only require to contribute up to unpaid value of shares; fully paid no liability
Members: Pay the promised amount
A company may be private or public
Private S.18(1)
Characteristics
Cannot invite public to deposit money
Max. members: 50
Cannot Invite public to sobscribe for shares or to take up debentures
Restriction on the right to transfer shares
May be exempt or non-exempt - shown E
No shares in the company are held by corporation
not more than 20 members
private company owned by government and gazette as an exempt private company
Exempt private company - exempted from filing a balance sheet + P&L; BUT HAVE TO FOR ANNUAL RETURN (TAX PURPOSE)
Public: listed or not
Characteristics
Separate Legal Identity / Entity
Salomon v. Salomon Co Ltd
SHOES
May sue & be sued in its own name
Foss v. Harbottle (1843)
want to sue shareholder due to misuse of company property but cannot, only can sue company
Has perpetual succession: Quality of carrying on forever
Noel Tedman Holdings Pty Ltd (1967))
husband and wife car crash
Has the power to hold property
May limit the liability of its members/ Members' liability for debts of the company
Limited by shares: unpaid value of shares held -s250(1)(d)
Guarantee: Amount promised to pay -s.250(1)(e)
UNLIMITED: CONTRIBUTE SUFFICIENTLY TO FULLY SATISFY COMPANY'S DEBT
Directors and their duties
Common Law and Statute
Act in good faith
Avoid conflict of interest
Use power for proper purpose
Act with due honesty care, skill, diligence
Prepare and keep proper accounts (s.201 CA)
Disclose certain information (s.156 CA)
Or be sued for damages, subject to criminal prosecution, censured, fined, sentenced to imprsionment
Limited Liability Partnership (LLP)
: combination of partnership and company
Similarities to company
Separate legal personality
all partners have limited liability
no upper limit of members
perpetual succession
dissolution proceedings same as a company
receivership, winding up, striking off but no judicial management, no schemes of arrangement outside of winding up
Similarities to partnership
relationship of partners governed by LLP
less formal internal agreements
taxed as partnership, not as separate legal entity
if LLP liable, partner liability to their contribution to capital
not obliged to have accounts audited or filed with Resgistrar
obliged to keep proper accounts, file annual declaration as to solve solvency
still personally liable in tort for own wrongful acts; not liable for wrongful acts of partners
E - commerce
what is it: buying and selling of goods and services over electronic medium
b2b, b2c, g2b, g2c, c2c
Obstacles
cannot check on credibility
questions on legality
technical limitations
changing the law
ways to improve consumer protection
cybercrimes/ computer misuse and cybersecurity act (section 3 - 9)
Cyberfraud and other crimes in cyberspace
Web auctions
General merchandise
Spoofing: pretend to be well respected organisations,
charities collect donations
Phishing : masquerade as banks and get info, make similar website, put details that will be stolen
Invesment scam
Online Lotteries
Credit card fraud
TO PROTECT THEMSELVES: BONA FIDE TRADERS:
Maintain good rep
get the site trusted mark
give details of privacy policy
be open, welcome enquiries
give plenty of info about business
Protecting yourself and your company : careful password selection, self policing, basic network security; companies can protect with secure firewalls, employee education, ensuring proper access guidelines and authority