Chapter 4Classification and survey of types of business organisation95
1 Which of the following business organisations have
been formed by registration?
(a)Wilkinson-Brown & Co, Chartered Accountants;
(b)Mammoth plc;
(c)The United Kingdom Atomic Energy Authority;
(d)Small Ltd.2 ‘A registered company is a juristic or legal person
and is therefore a legal entity distinct from its
members.’
Explain this statement and state two advantages
of incorporation showing how these advantages
depend upon corporate personality.3 The court will not allow the theory of corporate
personality to be used as a means of fraud or
sharp practice – the judge has the power to
‘draw aside the corporate veil’.
Explain what happens when the court does
draw aside the veil and describe a situation in
which the court has exercised its power.4 A and B are partners in an ordinary partnership.
The firm is insolvent. Joe, a creditor, has
successfully sued A for a debt of £2,000. What
rights, if any, has A against B?5 A, B, C and D wish to form a partnership in which
all of them will be limited partners. Advise them.6 What is the maximum number of employees
allowed to a company which wishes to qualify
as a ‘small’ company?7 Outline the provisions under which companies can
dispense with the audit requirement.8 Explain the regime of taxation which applies to:
■sole traders; and
■companies.9 Give a short account of ways in which mortgages
of real and personal property may be created.
Explain what is meant by the ‘equity of
redemption’.10 Discuss the importance in securities transactions of
the Bills of Sale Acts.11 When is it important for a person giving a guarantee
or other security to be advised by an independent
solicitor? State with reasons whether or not the
guarantee or other security will be unenforceable if
independent advice is not received.12 Fred Jones is a sole trader who wishes to expand
his business premises. Explain the basic planning
procedures to be followed.Self-test questions/activities
95
dismissed and the enforcement notice becomes effective,
it is an offence not to comply with it and could lead to a
prosecution in a magistrates’ court.
Planning and environmental
considerations
In addition to problems of business development in
terms of planning, a business may also fall foul of laws
relating to the environment and the two may clash. In
some cases the applicant must submit an Environmental
Impact Assessment setting out likely environmental effects
of the development together with proposals for rem-
edying these effects. In addition, the business may ask
the High Court for judicial review of the offending
restriction as in R v Kennet District Council, ex parte
Somerfield Stores(1999) where, in terms of noise being
emitted from refrigeration equipment, the council
planning authority placed a restriction of a lower
number of decibels on the planning permission than
the environment authorities had in an abatement
order served under the Environmental Protection Act- The High Court ruled in favour of the planning
authority.