Who was Oliver Greenwood?

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Constitution to open a company in UK

Let's start talking by simply defining and consider how to open a company in UK steps, what is a corporate constitution? If you only focus on the merely word ‘corporate’, it depicts most of the meaning of it. The first meaning we get from it, is something like, some laws or rules which have to be followed in a company to regulate it. Which is pretty much it, because if you have figured it out it on your own and you are NOT INDEED a law student, then yeah!!!! You sure is a genius. Well! Now let’s talk about the bookish meaning of the corporate constitution, initial documents of formation of UK (because that’s the main reason you are here to read this...aren’t you?), it can be pretty much put as: “The constitution of formation of UK defines the rules and regulations about how the company conducts the policy and also defines and implements the structure of the company. This includes and describes how the power is split between the directors and shareholders. It also defines the relation between the company, shareholders, managers, directors and other offices of the company.” Whenever there is a group of people operating under the same roof, there must be some subject of mutual interest and a common goal. If a company lacks these things, then it cannot operate properly and shall face consequences in the upcoming future. Similarly, with more than one person working at a single place, conflicts of interest arise and if there are no set rules for settling such matters, there can be disputes which can cause problems in the smooth running of the company. Hence, for the proper functioning and proper operation of a said company, some rules and regulations must be set, which can help in the times of conflict and commotion for the effective solution of the situation under consideration. For this purpose, the government of UK has devised some set of laws and regulations which help the hierarchy of the company to maintain a friendly environment for its workers which can further help in the development of the company in the future. Enforcement of the Contract of formation of UK: The contract, once formed, is applicable by and to the following parties: • The company can enforce the contract against its members • The members can enforce the contract against its company • The members can enforce the contract against other members • Non-members cannot have a say in the contract The following are some of the cases in which the corporate constitution plays a dominant role in solution of the problems. Hickman: In this case, the rights which were granted to a person as an outsider may not be enforced by the articles of association. Factually, the dispute between a company and its members can be settled with the help of arbitration. Eley v Positve Life: In this case, the company refused to acknowledge a particular solicitor after a contract with the said person. But since he was not a member of the company, he wasn’t able to enforce the articles against the company. Beattie v Beattie: This was a similar case to that of the Hickman, in which, a dispute between the Directors, rather than that of the members, was to be referred to an arbitration. But this was not enforceable on the articles since the disputed members were directors and held the right to have disputes referred to arbitration as directors. Rayfield v Hands: In this case, a member wanted to sell the shares to the directors and had followed through the law by providing prior notice the concerned directors. But the directors did not want to buy the shares. Since the provision held the relationship between the members and the directors as members, the directors had to buy the shares in the end. Quinn v Salmon: A managing director, suing the company as a member was able to obtain a ban on the article which prevented him from making certain transaction during the court proceedings. In this way, he protected the right given to him as a director and prevented the company from interfering in his transactions. The Provisions which can be Enforced: In case of internal irregularities, section 33 is not applicable as it is only applicable when there are matters of personal interest to be considered. The provisions which only impose obligations on the company are termed in words of internal irregularities. An individual member cannot impose the internal irregularity and it is the decision of the company as a whole whether to apply such laws. A single person only has a say in the matters concerning himself. MacDougal v. Gardiner: It was decided that the refusal of the chairman regardless of the poll of the members of the company was an internal irregularity. Pender v. Lushington: It was decided that the refusal of the acknowledgement of the votes, attached to the share of nominee shareholders was a breach of personal rights on the chairman’s account. These cases originally show us the importance of the say of the members during a poll. If the vote is refused, it is said to be an infringement of the personal rights of the members or the shareholders, whose vote is rejected. Hence, section 33 is applicable and the individual members, in such a case, can enforce their rights. Difference of Section 33 from other contracts: The contracts of the company are considered a public document and are open for the examination of the third parties for analysis of their dealings. So, the courts are reluctant to declare the section as a regular contract. The following exceptions are applicable to the section: • The section cannot be rectified as in case of other documents and is absolute. • A contract devised with the help of section 33 cannot have the terms which are hidden from the third party. • If, however, these terms are known to the third party, the terms can be added to the section. • Any such terms which may affect or violate the rights of the third party are not applicable to the section.

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