Business Organisations and the Law Essay Example | Topics and Well Written Essays - 2500 words

Business Organisations and the Law - Essay Example Principally, UK company law is ruled by the Companies Act of 2006, the Insolvency Act 1986, the Company Directors Disqualification Act 1986 and the old Companies Act 1985. A limited company can be registered in England and Wales, Scotland, Northern Ireland and Australia. Registration of business firms in Great Britain is done through Companies House while the registration of companies in Northern Ireland is through the Department of Enterprise, Trade and Investment (Davies 2008; Companies Act 2006; Sealy and Worthington 2007). 1. Private company limited by shares - this type of business organization has a share capital and the accountability of each member is restricted to the amount not paid on shares that a member holds; this type of private company cannot sell its shares to the general public 2. Private company limited by guarantee - here, a member does not throw in any amount as a contribution to the capital during its lifetime as it does not purchase shares. The member's liability is limited to the amount that he/she has agreed to contribute to the company's assets if it decides to wind up its activities 3. 3. Private unlimited company - this form of business organisation may or may not have a share capital and there is no limit to its members' liability and since there are no limitations on members' liability, the company can disclose less information compared to other types of companies 4. Public limited company - this kind of group has a share capital and the liability of every member is limited to the amount unpaid on shares that a member holds; it can also offer its shares for sale to the general public and likewise can be quoted on the stock exchange. Administrative Receivership In the United Kingdom, administrative receivership10 is a process whereby a creditor can enforce security against a business firm's assets endeavoring to gain settlement or compensation of the secured debt. Previously, it was the most accepted scheme of enforcement by secured creditors, however, recent governmental restructuring and legal developments in several jurisdictions have significantly diminished its importance in specific nations11. Administrative receivership diverges from simple receivership in that an administrative receiver is assigned over all of the assets and tasks of the business firm. This signifies that an administrative receiver can, as a rule, only be assigned by the holder of a floating charge. Because of this remarkable responsibility, bankruptcy/insolvency legislation more often than not endows broader powers to administrative receivers and likewise also have power over the exercise of those powers in an effort to take the edge off potential prejudice to unsecured creditors. Normally, an administrative receiver is an accountant with substantial knowledge, familiarity and understanding regarding insolvency matters. Current Implication As it is, administrative receivership is a significant component of contemporary insolvency practice. Today, business firms that plunge into financial complexities may well have security packages that were created prior to the 15th of September 2003, a circumstance