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25 Cards in this Set
- Front
- Back
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Law of associations covers: |
- simple partnership - trading partnership - limited partnership - company limited by shares - cooperative society - non-profit member organisation - foundation - European economic interest grouping and European company |
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Partnerships Act |
Covers the three types of partnership |
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Bolag |
One of the two groups of associations. Both partnerships and companies limited by shares are called bolag, and belong to that group. |
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Foreningar |
Two principle variants: - cooperative societies (covered by cooperative societies act) - non-profit memberorganisations |
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Simple Partnership |
- regulated by the Partnerships Act - exists once 2 or more legal persons have agreed to cooperate for a common purpose, with an undertaking from each - not a legal person/has no legal capacity - partners free to regulate on how partnership is governed - can't enter into agreements, so only the partner who entered the agreement is liable for contractual obligations - length of partnership defined in partnership agreement, can be definite or indefinate - indefinate partnerships should finish 6 months after one terminates |
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Trading partnership
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- 2 + people agreed to do business registered under Trade Registers Act
- is a legal person that can have rights, obligations and bring/defend action in court - partners are still jointly and separately liable for the debts of the partnership - new partners are liable for old debts, but ex-partners aren't liable for new debts - partners get to decide on the internal management of the partnership, but all partners have the right to inspect the accounts |
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Limited partnership |
- a trading partnership where one or more partners shan't be personally responsible for the debts of the partnership (the limited partner) - at least one partner has to be personally liable (the general partner) - once registered is a legal person - a limited partner can't represent the limited partnership in relations with other parties and has no right in management if partners have not agreed otherwise. |
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Cooperative Society |
- must have purpose of furthering economic interests of the members through economic activities - needs three members - becomes a legal person when registered as such - members have limited liability |
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Non-profit Member Organisation |
- not normally for profit but may involve economic activities - becomes legal person when members have agreed on articles of association and appointed a board of directors - members have limited liability - no legislation concerning non-profit organisations |
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Foundation |
A foundation has no members/owners and is characterised by 1+ people contributing money/property to the foundation where other people govern it. Has a legal personality. |
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Five characteristics of a company limited by shares: |
(General purpose is to make a profit) - legal personality - limited liability - majority decisions - organisation for decision-making process - certain degree of independence |
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The difference between Private and Public Companies |
Public companies have the right to invite the public to subscribe for new shares and other commercial papers. Private companies don't. |
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Procedure of formation of a company |
1 - one or several founders shall prepare a draft memorandum of association 2 - one or more founders shall subscribe for all shares in the company 3 - the shares shall be paid for 4 - the founders shall prepare, date and sign the memorandum of association 5 - the board of directors apply for registration of the company |
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One-man companies |
All shares owned by a single natural/legal person. |
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Different classes of share |
All shares must have the same rights, however these can vary. Classes of shares may differ with rights to participate in profits, assets, or voting rights. |
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Four organs controlled by the Companies Act |
- the general meeting of shareholders - the board of directors - the managing director - the auditors |
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General Meeting |
- Highest decision making organ in a company - AGM should occur once a year 6 months before end of financial year - Shareholder has the right to attend a general meeting or get a representative to - all share holders must be given equal treatment and not have decisions that affect others more - majority votes are usually enough - extroadinary general meeting if necessary |
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Board of Directors and the Managing Director |
- mandatory for public companies, who also need a managing director - at least 3 members Responsible for: company's organisation, management of company and internal control of company affairs - duty to establish procedures for work - continually assess financial situation - decision adopted by majority vote |
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Auditors |
- duty to protect owner's interest by monitoring management of company - 1 auditor for company - elected in the general meeting by shareholders - must be authorised/approved public accountant Duties: examine annual report, examine accounts, examine administration of company |
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Liability for damages |
- if a shareholder contributes to a violation of the Companies Act they're liable - directors, managing director and auditors can also be liable for intentional or negligent damage under the Companies Act |
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How can share capital be changed? |
- new issue of shares - issue of bonus shares - issue of convertible instruments - issue of warrants - reduction of the share capital |
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How can reduction of the share capital be made? |
- coverage of a loss as reported in the adopted balance sheet - repayment to the shareholders - transfer to a fund for purposes to be decided by the general meeting of shareholders |
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Protection of creditors |
- mandatory under the Companies Act - a company can't loan money to people closely related to the company - company can't give loans to enable a borrower to acquire shares in the company or a linked company |
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Protecting minority shareholders |
- board of directors can't act to give undue advantage to a shareholder or third party to the detriment of the company or other shareholders - GM has duty to answer questions of all shareholders - inc minority - if not satisfied with answer to question can bring legal action in court - minority have the right to appoint a minority auditor |
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Two forms of mergers: |
- absorptions - combinations |
