Syllabus for Business Associations

1. Outline and comparison of different types of business associations

” sole proprietorship

” partnership

” registered company

2. Partnerships

” nature of partnerships – their legal status, powers and characteristics

” creation of partnerships

” rights and duties of the partners inter se – rights and obligations arising in contract; fiduciary duties of partners

” rights and duties of the partners vis-a-vis third parties – liabilities of partners to third parties in contract and tort; authority of partners to bind the partnership in transactions with third parties

” introduction to dissolution

3. Development of companies

” the historical and economic background to the development of the registered company in Hong Kong

4. Formation of a company

” incorporation and registration

” problems relating to incorporation

” types of companies

5. Nature of a company

” separate corporate personality

” limited liability doctrine – liability of members limited by shares or limited by guarantee

” doctrines of piercing or lifting the corporate veil

6. Corporate constitution: memorandum and articles of association

” contractual effect of the memorandum and articles

” enforcement of the memorandum and articles

” ability of companies to alter the memorandum and articles, and restrictions under the general law and the Companies Ordinance

” corporate capacity

7. Membership

” subscribers to the memorandum

” registration of members

” membership in companies with share capital: issues and transfers of shares

” rights of members

8. Management and control

” the board of directors

” the members’ general meeting

” powers conferred by the Companies Ordinance

” powers conferred by the articles of association

” authority of directors to bind the company vis-a-vis third parties

” scope of control of the board by the members in general meeting

9. Duties of directors

” directors as fiduciaries

” acting bona fide in the interests of the company

” exercising powers for proper purposes

” avoiding conflicts of interest – conflict rule, profit rule, misappropriation rule

” acting with due care, skill and diligence – duties in equity and under the common law

” requirements of the Companies Ordinance

10. Protection of minorities

” proper plaintiff and irregularity principles – rule in Foss v Harbottle

” derivative actions on behalf of the company – fraud on the company exception to the proper plaintiff principle; the statutory derivative action

” members’ personal rights of action under the general law; equitable restrictions on the powers of the majority in general meeting

” statutory remedy in relation to unfairly prejudicial conduct

” winding up on the just and equitable grounds

” protection of class rights under the company?s constitution and under the Companies Ordinance

” statutory injunctions

11. Winding up

” Types of winding up: compulsory winding up by the court and members’ or creditors’ voluntary winding up

” Insolvency and other grounds for winding up

” Effect of a winding up order

” Process of winding up

” Functions and powers of the liquidator

” Assets available for distribution; re-opening of antecedent transactions

” Distributions and priorities

” Dissolution

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