Question

Question 1

1. People register different businesses for various reasons to make profit. Evaluate what is meant by the sole proprietorship business.                                                                                                                                                     

2. By the registration of a business, business owners experience a kind of certain transformation in their freedoms and limitations. Critically discuss the principle of separate legal personality in company law?                                                                                                                                                                       

There are types of contracts and each has its own consequences. On the other hand, various agreements constitute particular binding effects. On this premise, analyse the importance of the effects of a Company’s Regulation when registered?                                                                                                              

Answer 1

a. A sole proprietorship could be regarded as the business of a sole trader or individual entrepreneurship which is a type of enterprise which is being owned and also run by one person only. There is no legal difference between the owner ane the business entity and they are treated like one unlike corporation or partnerships.

b. In the principle of separate legal personality or corporate personality, a company is regarded as a separate person from its members or owners. Therefore this principle states that a company having a separate legal entity would be having perpetual succession, properietary interests, have their own personal signatures and stamps, debts, and can sue and or get sued by other seperate entities in the business.

c. The effects that could be seen after a company gets registered and a certificate of incorporation is being issued by the registrar are as follows:

1. The company would now become a separate legal entity from the date that is being mentioned on the certificate of the incorporation, which is then considered to be the date of birth for the company.

2.The company would then acquire a perpetual succession which means that members may come or go, but the company and the activities of the company would work on forever.

3. The company also can sue and can be sued by its own name as it gets a separate identify for its regulation in the business.

4. The company also becomes the owner for its property and the promoters of shareholders would now have the right to share in the profits of the company and start its operation activities and the business.