PCLL Conversion Notes  PCLL Conversion Notes - HK Business Associations

What's in the Hong Kong Business Associations Notes & Model Exam Answers (Past Paper Answers)?

Our Hong Kong Business Associations Notes & Model Exam Answers (Past Paper Answers) will provide you with a clear and complete synthesis of the most important points you need for your Hong Kong Business Associations PCLL Conversion exam. The table of contents of our Hong Kong Business Associations Notes & Model Exam Answers (Past Paper Answers) is shown below.

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Table of Contents for Hong Kong Business Associations Notes

1. Introduction.. 5

A. How to use Conversion Notes. 5

B. Abbreviations and Legislation.. 6

2. Sole proprietorship. 6

3. Partnerships. 6

A. Nature of partnerships. 6

i. Legal status. 6

ii. Formation. 6

B. Rights and duties of the Partners. 7

i. Among the Partners. 7

1) Rights and obligations. 7

2) Fiduciary duties of partners. 7

ii. Liabilities of partners to third parties. 8

1) Authority/liability of partners in contract 8

2) Credit contracts and holding out 8

3) Liability in tort 8

C. Dissolution.. 8

4. Companies. 8

A. Formation.. 9

i. Incorporation and Registration. 9

1) Old CO.. 9

2) New CO.. 9

ii. Problems relating to incorporation. 10

iii. Types of companies. 10

1) Private vs public companies vs company limited by guarantee. 10

2) Company limited by shares vs limited by guarantee vs unlimited Companies. 11

3) Hong Kong vs Non-Hong Kong Companies. 11

B. Nature of a Company. 11

i. Separate corporate personality. 11

ii. Limited liability. 12

1) Liability of members limited by shares or limited by guarantee. 12

C. Piercing or lifting the corporate veil 12

D. Corporate constitution and authority. 13

i. Memorandum and Articles of Association. 13

ii. Contractual effect of the Memorandum and Articles. 13

1) Pursuant to the Old CO: 13

2) Pursuant to the New CO: 13

iii. Enforcement of the Memorandum and Articles. 14

iv. Amendment to Memorandum and Articles. 14

1) Restrictions under the Companies Ordinance. 14

2) Restrictions under the general law.. 15

3) Enforceability of shareholders agreements to alter the Articles. 15

v. Corporate liability. 16

vi. Corporate capacity. 17

E. Membership.. 17

i. Subscribers to the Memorandum and Articles of Association. 17

ii. Registration of members. 17

iii. Membership in companies with share capital: issues and transfers of shares. 17

iv. Rights of members. 18

v. Order for inspection. 18

1) Standing. 18

2) Good Faith and Proper Purpose. 19

3) Making copies. 19

4) Ancillary orders. 19

5) Immunity from liability and secrecy. 20

F. Management and control 20

i. The board of directors. 20

1) Directors meetings - Companies Ordinance. 20

2) Directors meetings Common law.. 21

3) Directors meetings Model Articles. 22

4) Directors meetings Table A. 22

5) Managing director 24

i. Authority of directors to bind the Company. 25

1) Actual authority. 25

2) Ostensible authority. 26

3) Protected under Indoor management rule. 27

4) Statutory assumptions as to authority. 28

ii. The members general meeting. 29

1) Resolution. 29

2) Special Resolution. 29

3) Scope of control of the board by the members in general meeting. 30

4) Disclosure obligations (Common Law) 31

iii. Residual control in general meetings (Doctrine of Unanimous consent) 31

1) Where the board is unable to act 31

2) Ratification of directors acts. 31

iv. Informal corporate acts. 32

v. Powers conferred by the Companies Ordinance. 32

1) Auditors. 32

2) Alteration of articles and objects clause. 33

3) Directors. 33

vi. Powers conferred by the Articles of Association. 33

1) Model Articles. 33

2) Table A. 33

5. Directors Duties. 34

A. Directors as fiduciaries Standard of care. 34

B. Acting bona fide in the interests of the Company. 34

C. Exercising powers for proper purposes. 35

i. What is the legal purpose for which the power may be used?. 35

1) Improper purposes. 35

2) Proper purposes. 36

ii. Has the power been used for proper purpose as a matter of fact?. 36

D. Conflicts of interest 37

i. Conflict rule. 37

1) Was there a personal interest?. 37

2) Was there adequate disclosure of a material personal interest?. 38

3) Were statutory disclosure obligations satisfied?. 38

ii. Profit rule. 40

1) Was there secret profits?. 40

2) Was there a ratification of the breach?. 41

iii. Misappropriation rule. 42

1) Businesses started by former directors. 42

iv. Directors personally benefiting from opportunity turned down by the company. 43

E. Acting with due care, skill and diligence. 43

i. Duties in equity and Duties under the common law.. 43

F. Forgiveness and enforcement 45

i. Voidable and Void transactions. 45

ii. Restrictions regarding relieving directors from liability. 45

iii. Relief from Court 47

G. Requirements of the Companies Ordinance. 48

6. Shareholders and shareholder rights and remedies: Shareholders control over the running of the Company memorandum and articles. 49

A. Proper plaintiff and irregularity principles: Rule in Foss v Harbottle. 49

B. Derivative actions on behalf of the Company. 49

i. The common law derivative action: Fraud on the company exception to the proper plaintiff principle. 49

ii. The statutory derivative action. 49

C. Members personal rights of action under the general law.. 50

i. Equitable restrictions on the powers of the majority in general meeting. 50

D. Statutory remedy in relation to unfairly prejudicial conduct 51

E. Winding up on just and equitable grounds. 53

F. Protection of class rights. 54

i. Under the Company's Articles and under the Companies Ordinance. 54

G. Statutory injunctions. 55

7. Corporate Insolvency and Liquidation.. 56

A. Winding up.. 56

i. Compulsory winding up by the court and Members or creditors voluntary winding up. 56

B. Insolvency and other grounds for winding up.. 56

i. Winding up by the court 57

ii. Voluntary winding up. 57

C. Effect of a winding up order 57

D. Process of winding up.. 59

i. Winding up by the court 59

ii. Voluntary winding up. 60

1) Members Voluntary winding up. 60

2) Creditors Voluntary winding up. 60

E. Functions and powers of the liquidator 60

F. Assets available for distribution.. 60

i. Re-opening of antecedent transactions. 60

ii. Winding up by the court 61

iii. Voluntary winding up. 61

G. Distributions and priorities. 61

i. Winding up by the court 62

ii. Voluntary winding up. 63

H. Fraudulent/Unfair Preferences. 63

I. Dissolution.. 64

i. Winding up by the court 64

ii. Voluntary winding up. 64



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