PCLL Conversion Notes and Model Exam Answers (PCLL Conversion Past Paper Answers) for Business Associations for the PCLL Conversion Examinations.
1. Outline and comparison of different types of business associations
- sole proprietorship
- partnership
- registered company
2. Partnerships
- nature of partnerships – their legal status, powers and characteristics
- creation of partnerships
- rights and duties of the partners inter se – rights and obligations arising in contract; fiduciary duties of partners
- rights and duties of the partners vis-a-vis third parties – liabilities of partners to third parties in contract and tort; authority of partners to bind the partnership in transactions with third parties
- introduction to dissolution
3. Formation of a company
- incorporation and registration
- problems relating to incorporation
- types of companies
4. Nature of a company
- separate corporate personality
- limited liability doctrine – liability of members limited by shares or limited by guarantee
- doctrines of piercing or lifting the corporate veil
5. Corporate constitution and authority: memorandum and articles of association
- contractual effect of the memorandum and articles
- enforcement of the memorandum and articles
- ability of companies to alter the memorandum and articles, and restrictions under the general law and the Companies Ordinance; enforceability of shareholder agreements to alter the articles
- corporate liability
- corporate capacity
6. Membership
- subscribers to the memorandum
- registration of members
- membership in companies with share capital: issues and transfers of shares
- rights of members
7. Management and control
- the board of directors
- the members’ general meeting
- powers conferred by the Companies Ordinance
- powers conferred by the articles of association
- authority of directors to bind the company vis-a-vis third parties and agent authority and indoor management rule
- scope of control of the board by the members in general meeting
8. Duties of directors
- directors as fiduciaries
- acting bona fide in the interests of the company
- exercising powers for proper purposes
- avoiding conflicts of interest – conflict rule, profit rule, misappropriation rule
- acting with due care, skill and diligence – duties in equity and under the common law
- forgiveness and enforcement
- requirements of the Companies Ordinance
9. Shareholders and shareholder rights and remedies· shareholders control over the running of the company: memorandum and articles
- proper plaintiff and irregularity principles – rule in Foss v Harbottle
- derivative actions on behalf of the company – fraud on the company exception to the proper plaintiff principle; the statutory derivative action
- members’ personal rights of action under the general law; equitable restrictions on the powers of the majority in general meeting
- statutory remedy in relation to unfairly prejudicial conduct
- winding up on the just and equitable grounds
- protection of class rights under the company’s constitution and under the Companies Ordinance
- statutory injunctions
10. Corporate Insolvency and Liquidation
- Types of winding up: compulsory winding up by the court and members’ or creditors’ voluntary winding up
- Insolvency and other grounds for winding up
- Effect of a winding up order
- Process of winding up
- Functions and powers of the liquidator
- Assets available for distribution; re-opening of antecedent transactions
- Distributions and priorities
- Fraudulent/Unfair Preferences
- Dissolution