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PRE-INCORPORATION CONTRACTS & INCORPORATION OF COMPANY - Coggle Diagram
PRE-INCORPORATION CONTRACTS & INCORPORATION OF COMPANY
Promoters
Twycross v Grant
A person who undertakes to form a company with reference to a given project and to set it going, and who takes the necessary steps to accomplish that purpose.
Tracey v Mandalay Pty Ltd
The idea of exertion for the purpose of getting up and starting a company and also the idea of some duties towards the company imposed by or arising from the position which the so-called promoter assumes towards it.
A promoter is one who undertakes to form a company with reference to a given project and to set it going, and who takes the necessary steps to accomplish that purpose.
Duties of Promoters
Independent board of directors
Existing or intended shareholders
Fiduciary relationship
Duty to disclose to the company any profit which he may secure
Remedies for Breach
Recovery of secret profit
is not necessary that there need an imputation of evil purpose or conscious fraud
Damages for breach of fiduciary duty
company may also have a remedy in damages against its promoters for breach of their fiduciaries duties.
Rescission of contract
promoter has sold his own property to the company
Statutory Lifting of Corporate Veil
Sec. 304(1)
Liability on officer responsible for fraudulent trading by company.
Sec. 305
The officer in the company who misapplied or retained the company’s money or property shall be liable to restore or repay in the event company is wound up.
Sec. 303(3) & 304(2)
The officer of the company contracted a debt for a company where he had no reasonable expectation that the company would be able to pay debt.
Sec. 365(2)(b)
If the officers wilfully pays or permits to be paid dividend exceeds the comp’s profits, personally liable to pay creditors.
Sec. 121
Requires company to use its name in the documents or transaction .
Sec. 46 EPF Act
The employer who failed to comply with the section (contribution) shall be liable.
Sec. 67
Offence relating to financial assistance to purchase shares, etc.
Sec. 108A Emp. Soc. Sec. Act
The employer who failed to provide the SOCSO shall be personally liable for the company.
Sec. 36
1 remaining member & carries business for more than 6 months – liable to pay all debts.
Effects of Incorporation
Separate legal entity
refers to a type of legal entity with detached accountability.
Can sue and be sued
All legal action involving a company must be in its own name.
Ability to own property
A company may hold property in its own right, either movable or immovable.
Limited liability on members
All liabilities incurred by the company are to be borne by the company itself and not its members.
Perpetual succession
The existence of a company does not depend on the existence of its members.
Powers of a Company
Lie in the memorandum, company articles and relevant legal provisions.
A company acts trough its agent
A company, being an artificial legal person can only act through natural persons.
Pre-Incorporation Documents
Form 48A
Statutory declaration.
Form 13A
A copy of the original name acceptance letter.
Form 6
Letter of declaration.
Form 48F
Declaration from the company secretary.
AoA
Internal rules and regulations.
Registration fee
Depends on the amount of authorized capital.
MoA
Basis purpose, people & brief factual account of comp.
Certificate of Incorporation
F8
Public Co.
Contents
Company number.
The type of company that has been set up e.g. limited by guarantee or an unlimited company.
Date of incorporation.
The company’s status e.g. private or public.
Company name.
F9
Private Co.