Question

(A) Harry, William and Kate are management consultants and for a number of years have together run ‘HKW Management Consultants’ as an ordinary, unregistered, partnership. The business has become increasingly successful and Harry, William and Kate want to borrow money from the bank so that they can buy bigger premises and better computer equipment. Their accountant has told them that they should consider incorporating their business.

Advise Harry, William and Kate on the legal considerations which may help them decide whether or not to incorporate their business or whether to continue trading as a partnership.

(B) Critically discuss the legal significance of the certificate of incorporation.

Answer 1

1.

The accountant 's recommendation that the company be incorporated is right harry William and Kate will incorporate their company as an organization.Due to the growing performance of their companies, it could be likely that a partner may fail and have the risk of taking personal liabilities to escape the situation in which they have to integrate their business in the company's type. If the liability of the company is minimal, the liability is completely limitless in the case of a relationship.

2.

Company's "Certificate of Incorporation" is defined as legal certificate confirming existence of an entity under law. This certificate authorises an entity or a company to legitimately do business. At the most basic level, this Certificate contains following information:

1. Company's Name.

2. Whether a Corporation is for profit or non-profit.

3. When it was incorporated and became legal and legitimate.

4. Shareholding pattern. No. of shares authorized to be issued.

5. Directors of the Company.

6. Location of the Company.

7. No. of Parties involved in the formation of the company.