review-company and exercise

7/29/2019 Review-Company and Exercise

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Limited Company

Meaning of limited company On the basis that the liability of its shareholders islimited to amount unpaid (if any) on shares held by

them.


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Company is promoted and formed by three or moreperson(called promoters).

Capital is divided into equal shares. Liability is limited to the amount unpaid on the

shares.


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Forming of a company

Incorporation Process1. Three or more persons agree to make a

Memorandum of Association which contains

Name of the company with the word limitedRegistered officeObjectivesDeclaration of the shareholders is limitedAmount of share capital and value of each shareNames, address, occupations and signatures of the

promoters and the number of shares subscribed by each

of them.


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2. Registering a Memorandum of Association3. Subscribed of shares4. To hold statutory meeting for;

Creation of the regulation (if any) Ratification of any contract and any expenses Appointment the directors and auditors and the fixing

of their powers.

5. Hand over the business to the director (s)6. 25% payment of shares (at least)7. Registering the company within 3 months


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Effects of incorporation

becomes a legal entity (juristic person) can sue or be sued Make a contract own property

What will be effected if the registration is not madewithin the fixed time?

Company is not formed and all money received from theapplicants must be returned without deduction includingthe interest. And the promoters will be liable for allobligation of the promotion of the company.


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Promoters are jointly and unlimitedly liable for allobligations and disbursements which are not

approved by the statutory meeting. Even if those areapproved, the promoters remain liable until the

registration of the company.


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Management of company

Director or Board of director has an authority tomanage the company. He is appointed by the

shareholders of the company.


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Shareholders Meeting

Board of Director

Director


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Appointment of directors

Thefirst director (s) of the company must beappointed by the statutory meeting.

Thesubsequent director (s)is governed by thegeneralmeetingof the shareholders.


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Cases when the director (s) is

unavailable

Resignation Retirement Dismissal Disqualification


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Resignation of director

A director may resign his office anytime Provision for resignation is usually made in theregulations of the company The office of director shall be vacated if the director

resigns his office by notice in writing to the

company.


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Retirement

If no regulation of a company for retirement ofdirectors, one-third of the directors shall retire by

rotation in each year.

A retiring director is eligible for re-election


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Dismissal

If a general meeting removes a director before theexpiration of his period of office, and appointed anotherperson instead, the person so appointed shall retain hisoffice during such time only as the removed director was

entitled to retain the same.

The appointment of every new director shall beregistered within 14 days from its date

New director

1 year

6 months


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Disqualification

If a director becomes bankrupt or incapacitated, hisoffice is vacated


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Board of director

Board of director is a group of managing person ofa company


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Review

Fill in the Blank


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According to the Thai Civil and Commercial Code, thereare ____ types of General Partnership including

__________________.

Also, there is another type of partnership which iscalled__________ partnership. The law provides in the

general provision that a contract for the formation of a

partnership or company is a contract whereby _____ ormore persons agree to ______________, with a purpose to

share____________.


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Section 1013

There are three kinds of partnerships or companies 1_________________ 2_________________ 3_________________


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_____________ is a kind of partnership in which allthe partners are jointly and unlimitedly liable for all

obligations of the partnership.

If nothing has been agreed between the partners asto the management of the business of the

partnership, such business may be managed

by___________. No partner may enter into acontract to which another partner _________.


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If it is agreed that matters relating to the business of thepartnership shall be decided by a majority of partners,

each partner shall have ______ vote, irrespective of theamount of his ______________.

Even if the partners have agreed that the business of thepartnership shall be managed by one or more managing

partners, each non-managing partner has the rightto__________

_____________________________________.


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If a partner on his own account or on account ofanother person carry on, without the consent of the

other partners, any business of the same ______ and_______ with that of the partnership, the other

partners are entitled to claim from him all ________

which he has made OR __________ for the injury

which the partnership has suffered thereby. But such

claim cannot be entered later than ______ year afterthe date of contravention.


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If a partner, without the consent of the otherpartners, transfers to a third person the whole or part

of his share in the profits of the partnership, suchthird person (does/does not) become a partner.


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The share of each partner in the profits or losses is inproportion to his/her __________.


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Board meeting

Any director may at any time summon a meeting ofdirectors


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Quorum of the board meeting

Quorum is the number of people required to bepresent before a meeting can conduct business

The quorum shall be 3 unless otherwise provided bythe company regulation

In case of the number of directorless than thequorum, the subsisting directors may not do

anything except increasing the number of directorsup to that number.


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Chairman of the board

meetings

If no chairman is elected or if at any meeting thechairman is not present at the time appointed for

holding the same, the present directors may chooseone of their numbers to be chairman of such

meeting


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Voting at board meetings

Voting at board meeting is governed by theregulation of the company and is normally one vote

per director

In case of no regulation of the company, anymeeting of the board of director are decided by a

majority votes; in case of equality of votes the

chairman has a casting vote


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Delegation of power to

managers or committees

The directors may delegate any of their powers tomanagers or to committees consisting of members of

their body. Every manager or committee shall, inthe exercise of the power so delegated, conform toany order or regulations that may be imposed onthem by the directors

Unless provided otherwise by the delegation, anymeeting of a committee shall be decided by amajority of votes of the members; in case of anequality of votes the chairman has a casting vote


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Duties and liabilities of

directors

Law of agency shall apply to the director, companyand third person.

If a board of director appoint the managing director,he will be the agents company. The other director

are not the agent

Company = principal Director (s) or managing director = agents company


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Duties of directors

The director must in their conduct of the businessapply the diligence of a careful business man. The

are jointly responsible for;1. The payment of shares by the shareholders being actually

made

2. The existence and regular keeping of books anddocuments prescribed by law

3. The proper distribution of the dividend or interest asprescribed by law

4. The proper enforcement of the resolution of the generalmeeting


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Duties of directors (cont.)

A director may be individuallyliable if;1. he undertakescommercial transaction of the same

nature as and competing with that of the companywithout the consent of the general meeting, either on

his own account or that of third person,

2. nor may he be a partnerwith unlimited liabilityinanother commercial concern carrying on business of

the same nature as and competing with that of thecompany


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Effects of breach of duty

By company By the shareholders:

In case, the company refuses to sue against the director,the shareholder (s) may sue a director for injury caused

by him.

By the creditor: The creditor, upon liquidation, may sue against the

director only an amount money that the companyremains liable to him.


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T/F

There are only two types of business organizationunder the Civil and Commercial Code, which are

partnership and company

General Partnership or Ordinary Partnership doesnot need to be registered.

Both general partnership and limited partnershiphave two types of partners.


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Partner in general partnership is liable for allliabilities of partnership even in a transaction that

his own name does not appear.

There are two forms of contribution in generalpartnership.

The profit can be distributed whenever partnershiphas income.


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Every type of partner can run business that has asame nature and competing with partnership.

Partnership can be dissolved at any time withoutlegal regulation.

Limited partner is bound by the same legalprinciples as the partner in general partner.

Managing Partner has both direct and indirectmanagerial power in partnership.


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Describe characteristics of the

share of the company limited.

1. The amount of share may not be less than 5 baht2. Share is indivisible3. The whole amount of every shares must be paid inmoney, except preferences shares allotted.4. A certificate must be issued to each shareholder for

the share held by him. (signed by the director andbear seal of the company)

5.

Shares are transferable without the consent of thecompany except in case of shares entered in a namecertificate or otherwise provided in the regulation ofthe company


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What is general meeting of

shareholders?

A general meeting of shareholders is the way thatShareholders controlthe management of business of

the company. It shall be held withinsix months after

the registration and shall subsequently be held once

at least in every twelvemonths. Such meeting is

called an ordinary meeting.


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Provide all situations that can summon

an extraordinary meeting.

The reasons to summon extraordinary meeting areas follows

1. Whenever the directors think appropriate2. When the company has lost 50% of its registered

capital

3. The shareholders ,not less than one-fifth of shares ofthe company, require in writing

4. Purpose of filling the vacancy among the auditors.


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Give all circumstances that need special

resolution in general meeting of

shareholders.

A special resolution is required for the followingmatters;

1. Changes of the memorandum of association2. Increase or reduce of capital3. Insurance of new shares as fully paid up otherwise

than in money on any increase of capital

4. Dissolution of the company5. Amalgamation of the company


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Special Resolution

Any business prescribed by law to be transacted bya special resolution with the majority of votes of

not less than three fourth of the total votes of theshareholders attending the meeting and eligible to

cast the vote.

(**the law has been changed in B.E.2551)


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Essay (10-15 marks)Mr. Joe is a shareholder, holding 51% of shares inPause Company Limited. On 1 September 2005, Mr. Joefound that some of directors had cheated on thecompany. Mr. Joe wants to dismiss those directors.However, the ordinary meeting will be held on 1 June2006. Mr. Joe thought that it is too late to wait for suchmeeting in order to issue a resolution to dismiss thedirectors because of the cheating director has injured thecompany too much.

What Mr. Joe can do in order to dismiss the directors?Please explain the process supported by legal provisions.


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You should explain by using

these rules

The shareholders represents at least one-fourth of the capitalof the company shall be a quorum. If there is no quorumpresent within one hourfrom the time specified for the meeting,

such meeting shall be dissolved

If a general meeting removes a director before theexpiration of his period of office, and appointed anotherperson instead, the person so appointed shall retain hisoffice during such time only as the removed director was entitled

to retain the same.

The appointment of every new director shall be registeredwithin 14 days from its date


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Good luck!

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