S/L/59. Benefits and legal consequences of changing from a partnership to companies

This essay answers specific questions about the benefits and legal consequences of changing from a partnership to companies. All legislation and relevant statutory provisions are detailed. The following questions are addressed: How can they minimize the risk to the assets to be transferred to the company should the business fail? What provisions should be included in the Articles of Association to ensure that Lorraine and Brenda can retain control over the business? To what extent can the companys financial affairs be kept secret from the public? What statutory books and registers must be kept at the companys Chancery Lane premises and what may be kept at the trading premises in Essex? What are the rights of the members, the creditors and the general public to inspect these books and registers? To what extent, if any, could Lorraine or Brenda or both incur personal liability for the companys debts if the business fails? Prior to incorporation, Lorraine, as promoter, entered into a contract to purchase office accommodation for ‘South East Antique Shop from Alfie; but now Alfie does not want to honor the contract.