ASSIGNMENT INSTRUCTIONS Module Title: Business Law for ManagersModule Code: BB415005S Level:...

Question

ASSIGNMENT INSTRUCTIONS

Module Title: Business Law for Managers
Module Code: BB415005S Level: 7

Academic Year: 2012/13 Semester: 2

Module Leader: Christina McCarthy

Instructions: Answer all questions.
Word Limit: 4,000 words
Written assignments must not exceed the specified maximum number of words. All assignments which do so will be penalised. The penalty will be the deduction of marks at the Marker’s judgement. Assignments will not be accepted without a word count on the cover sheet.
Submission Date: This assignment must be received no later than 15^th August 2013. Work submitted after this date will receive a mark of 0 unless an extension has been approved in advance of this deadline.
Requests for short-term extensions will only be considered in the case of illness or other cause considered valid by the Student Adviser. These must normally be received and agreed by a Student Adviser in writing at least twenty four hours prior to the deadline.
Please refer to the Academic Regulations or your Student Handbook for full details.
Further details: This assignment must be completed individually.
This assignment must be attached to a completed University Assignment Cover Sheet and accompanied by a completed University Assignment Receipt before submission.
Any attachments (such as computer discs) must be marked with your SID number(s) and securely attached to your assignment before submission.

Business Law for Managers
September 2012
Coursework assignment
Analysis of the principles underlying the law, as well as consideration of the practical application of legal regulations, is essential.
All questions must be answered.
Question 1
The doctrine of incorporation allows entrepreneurialism to flourish and ensures that a future shareholder can assess his or her potential maximum liabilities when starting a company. However, the privilege offered by this doctrine can be abused, therefore law-makers must establish wide and pragmatic grounds under which the ‘veil of protection’ offered by the doctrine of incorporation may be lifted.
Define the doctrine of incorporation and explain and analyse the statutory and case law grounds upon which the protection offered by the doctrine may be lost.
(40 %) (1,500 words)
Question 2
Compare a ‘Partnership’ with a ‘Limited Liability Partnership’ on the basis of:

partnership creation
partners’ liability, and
partnership dissolution

Cite relevant statute to support your answer, with case law examples in application.
(40 %) (1,500 words)
Question 3
A dispute has arisen between a senior manager and a junior employee. Advise both parties as to the nature and mechanisms of litigating their dispute compared with the process of using the Alternative Dispute Resolution practices of mediation and arbitration.
(20 %) (1,000 words)
END OF PAPER

005_c5neapo-po2234wh.doc

Robert · Accepted Answer

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Business Law for Managers
Module Title: Business Law for Managers
Module Code: BB415005S   Level: 7
Academic Year: 2012/13 Semester: 2
Module Leader: Christina McCarthy
Word count: 4,266 words   
 
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Business Law for Managers 
Contents 
 
Question 1 .................................................................................................................................. 3 
Answer ....................................................................................................................................... 3 
Introduction ............................................................................................................................ 3 
Doctrine of Incorporation ...................................................................................................... 4 
Lifting the veil of corporation ................................................................................................ 6 
Under legal Jurisdiction ..................................................................................................... 7 
Under statutory requirements ............................................................................................. 8 
Conclusion ............................................................................................................................. 8 
Question 2 .................................................................................................................................. 9 
Answer ....................................................................................................................................... 9 
Introduction ............................................................................................................................ 9 
Partnership ............................................................................................................................. 9 
Partnership creation ............................................................................................................. 11 
Partners’ liability .................................................................................................................. 12 
Partnership dissolution ......................................................................................................... 13 
Question 3 ................................................................................................................................ 15 
Answer ..................................................................................................................................... 15 
Introduction .......................................................................................................................... 15 
Litigation .............................................................................................................................. 15 
Alternative dispute resolution .............................................................................................. 16 
Mediation ......................................................................................................................... 16 
Arbitration ........................................................................................................................ 17 
Neutral evaluation ............................................................................................................ 18 
Negotiation ....................................................................................................................... 18 
Conclusion ........................................................................................................................... 18 
Bibliography ............................................................................................................................ 19
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Business Law for Managers 
Question 1
The doctrine of incorporation ensures that a future shareholder can assess potential 
maximum liabilities when starting a company.
However, the privilege offered by this doctrine can be abused, therefore law-makers 
must establish wide and pragmatic grounds under which the ‘veil of protection’ offered 
by the doctrine of incorporation may be lifted.
Define the doctrine of incorporation and explain and analyse the statutory and case law 
grounds upon which the protection offered by the doctrine may be lost. 
Answer 
Introduction  
In simple words incorporation is a process through which a company is formed; doctrine of 
incorporation is a part of business law that discusses different parameters on how a 
corporation is formed and incorporated within the system. This law helps in growth of the 
business by helping and promoting entrepreneurship within nation. However, on several 
consequences it has been seen that this doctrine has been abused and misused. Under that 
scenario law makers have been forced to uplift the veil of incorporation. This answer will 
help in understanding the concept of doctrine in detail and various scenarios and situation 
under which the laws was misused by others and how this doctrine can  be lifted.   
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Business Law for Managers 
Doctrine of Incorporation  
The incorporation doctrine of business is related with the formation of the business; this 
theory helps in determining the existence of dissolution of any organization, according to this 
theory this depends of the country of incorporation. This theory also helps in resolving 
internal matters of the company by giving a structure of action; for instance according to 
incorporation doctrine all the internal matters of the firm related to its stakeholders, directors, 
employees, finance, etc are decided upon state of incorporation (Beatty & Samuelson, 2009). 
For instance, a company is operating in different regions, so the doctrine of incorporation 
helps in understanding the governing law within the organization; it also facilitate a firm in 
doing business worldwide with a unique legal identity.  
According to this doctrine, the governing law will be of the state under which the company 
was registered by the management. With the help of this law, companies are in a position to 
start their operation in different parts of the world, with legal management under their 
jurisdiction.  This concept of incorporation helps in forming simplicity within operation by 
providing a legal identity which is unique for all areas of operation (Rush & Ottley, 2006). 
Under this system, management can select a less restrictive law regime; but whatever they 
select, they have to follow forever. Therefore, the incorporation doctrine is better as it foster 
cross culture business within company by giving it ease of expanding its business in different 
market without legal complexity.  
Beside this, the form of business chosen while incorporation help the shareholders in 
assessing maximum amount of liabilities which they might have to bear in future; there are 
different types of company under which registration can be done, it include public limited 
company, private company limited share, unlimited company, company with limited share,  
partnership, limited partnership and limited liability partnership. Different parameters such as 
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Business Law for Managers 
governing body, laws followed, legal binding, capital and profit sharing clause will vary with 
the type of institution chosen.  
For instance, in limited liability firms the amount of liability which a partner or shareholder 
will possess during dissolution is fixed; so there is finite and restricted amount of liability 
which has to bear by shareholders. Other basic factors of incorporation include registering the 
company with a unique name, which is not used by anyone; agreement of the company 
should clearly mention about all the powers and authority share by administrator within the 
organization.  
Shareholders holds a strong position under Companies Act 2006, they have number of rights 
including voting rights, selecting board of directors, removing board of director and taking 
part in crucial decisions which might impact the financial position of the company, such as 
merger, acquisition, takeovers etc (MacIntyre, 2011).  
The ownership among the shareholders of the company in terms of their power and control 
over the organization and its operation can be understood with the help of common stock. 
Common stock helps in dividing the interest of all shareholders proportionally; this is done 
by evaluating the number of share allocated to each shareholder out of total number of share 
issued by the company. Shareholders who are holding common stock in the company have 
the right to participate in the decision making function and voting within organization.  
On contrary to this is the real seat theory, according to which c company should follow all the 
laws and governing system from the state in which the headquarters or main administration 
office is situated, which is also defined with the term “real seat”. This type of incorporation 
system is being accepted by several countries such as Germany, Spain, Greece and many 
others. There are several authors who claim that real state theory is better than the 
incorporation theory as it helps in discouraging formation of letterbox companies and ensure 
legal and economic identity.  
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Business Law for Managers 
Lifting the veil of corporation  
According to the general law of incorporation business and its shareholders are treated as 
spate business identity by law; however in several cases it has been found out that this law 
has been misused by shareholders or any employee of the organization to fulfil their 
malpractice; in such cases this clause of separate identity is removed by lifting the veil in 
between shareholders and legal identity of the firm. The main objective of this law is to 
ensure that no individual should be in a position to hide their ill activities behind the 
corporate identity (Bagley & Dauchy, 2011).  
The case of Salomon vs.

ASSIGNMENT INSTRUCTIONS Module Title: Business Law for Managers Module Code: BB415005S Level: 7 Academic Year: 2012/13 Semester: 2 Module Leader: Christina McCarthy Instructions: Answer all questions....