Unit 2

1. Can shares of the uk private company limited (ltd) by shares be freely traded on a stock exchange? What companies can freely trade shares on a stock exchange?

Only existing shareholders, or company.

Trade could – public limited companies, partnerships.

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Shareholders are not personally liable for the debts of the corporation in both a C corporation (USA) and a private limited company (UK). A C corporation may become a public corporation, with its shares being bought and sold either through a stock market or “over the counter”.

A private limited company differs. Its shares are not available to the general public.

2. Compare a company and an llp?

Limited liability partnership - It is partnership in which obligations accrue to the name of the partnership rather than the joint names of its individual members. The only personal liability that an individual partner has his predetermined contributions to partnership funds.

LLP

Advantages:

- Unlike company, the LLP more flexible in terms of decision-making, and board meetings, minutes books and annual or extraordinary general meetings are not required.

- LLP enjoys the tax status of a partnership and limited liability of its members.

Disadvantages:

- LLP must submit an annual return to Companies House and maintain a list of accounts according to Companies Act formulae. (accounting requirements).

- If the turnover of the LLP exceeds 350.000 annually, the accounts must be professionally audited. (accounting requirements).

- Claw-back provisions of the insolvency (liquidator is able to set aside any transactions).

- Designated member.

Company – business association, legal entity, personal liability.

Advantages:

- Limited to shareholder contributions.

- Company can be any size.

Disadvantages:

- Double taxation.

- The demands for constitutional documents (minutes book, meetings).

3. Give a definition to the term ‘shareholder’.

Shareholder is a member of the company by virtue of (по средством, в силу) an acquisition of shares in a company.

4. What advantages does an LLP have?

Unlike company, the LLP more flexible in terms of decision-making, and board meetings, minutes books and annual or extraordinary general meetings are not required.

LLP enjoys the tax status of a partnership and limited liability of its members.

5. What associations are legal entities?

Legal entity is a business association which has the character of a legal person.

6. What can insolvency lead to?

Continuous losses may result in insolvency and the company going into liquidation. Insolvency might lead to winding-up.

7. What can make the court interfere in the company’s affairs?

The courts are generally reluctant to interfere, provided the relevant act or omission involves no fraud, illegality or conflict of interest.

8. What caused the appearance of the LLP Bill?

The LLP Bill was introduced in response to the growing concerns surrounding large accountancy firms moving their business operations offshore. Large accountancy practices had expressed their affairs by way of partnership.

9. What corresponds to the UK private company limited by shares in the US legislation?

C corporation (US) are similar to private limited company in many ways, particularly in respect of liability. Shareholders are not personal liable for the debts of the corporation in both C corporation and a private limited company. But unlike a PLC, C corporation may become a public corporation, with its shares being bought and sold either through a stock market or “over the counter”.

10. What describes a company’s state of health?

A company’s state of health is reflected in its accounts, including its balance sheet (бух отчет) and profit-and-loss account (баланс прибыли и убытков). Healthy profits might lead to a bonus or capitalization issue to the shareholders. Continuous losses may result in insolvency and the company going into liquidation.

11. What did the UK target when the LLP Bill became a law?

The target was to create a new way of partnership and decrease the moving of business operations offshore.

12. What disadvantages does an LLP have?

- LLP must submit an annual return to Companies House and maintain a list of accounts according to Companies Act formulae. (accounting requirements).

- If the turnover of the LLP exceeds 350.000 annually, the accounts must be professionally audited. (accounting requirements).

- Claw-back provisions of the insolvency (liquidator is able to set aside any transactions).

- Designated member.