Company Law - Assessment Example

Company Law - Assessment Example Company Law - Assessment â€" Assignment Example > Corporate or company laws are by nature limiting to the stakeholders at hand and at the same time also protecting the interest of stakeholders. This paper presents two cases of simple but important situation that will very clearly define the role of company laws in the relationships of shareholders with regards to their personal interests and preferences as well as changes in situations. As defined, “Corporation Laws, a corporation or a company is an artificial being created by operation of law, having the right of succession and powers, attributes and properties expressly authorized by law or incident to its existence” (De Leon, p. 184). The uniqueness of the two cases presented in this assignment challenges the following specific basic distinctions of being a corporation or a partnership: manner of creation â€" a partnership is created by mere agreement of parties, while a corporation is created by law or by operation of law (Private Corporations, The Corporation Code, B.P. B lg. 68 Section 2, p. 184); powers â€" a partnership may exercise any power authorized by the partners provided it is not contrary to law, morals, good customs, public order, or public policy, while a corporation can exercise only the powers expressly granted by law or implied from those granted or incident to its existence (Section 2, p. 190); transferability of interest â€" “in a partnership, a partner cannot transfer his interest in the partnership so as to make the transferee a partner without the consent of all other existing partners because the partnership is based on principle of deltus personarum, while in a stock corporation, a stockholder has the right to transfer his shares without the prior consent of the other stockholders because a corporation is not based on this principle” (Section 2, p. 191). The purpose of this paper is to present necessary evidences, principles and popular or similar cases that can best support my stand as answers of the questions presented. Foremost, to establish the authenticity of corporation laws, this paper shall site the law from the California Corporations Code Section 103: “Every corporation organized under the laws of this state, any other state of the United States or the District of Columbia or under an act of the Congress of the United States, all of the capital stock of which is beneficially owned by the United States, an agency or instrumentality of the United States or any corporation the whole of the capital stock of which is owned by the United States or by an agency or instrumentality of the United States, is conclusively presumed to be an agency and instrumentality of the United States and is entitled to all privileges and immunities to which the holders of all of its stock are entitled as agencies of the United States” (FindLaw For Small Businesses, http: //www. leginfo. ca. gov/cgi-bin/displaycode? section=corp group=00001-01000 file=100-195). Thus, the references shall be in accordance with t he above general provision. In the case of Tony, Gordon and John, due to the personal history between Tony and Gordon, Gordon has desired to alter the company’s articles of association citing the new articles: “Any member who carries on business competing with the company shall be required by the company, by ordinary resolution, to sell his shares to the other members at a fair price to be fixed by the directors” For this to materialize, the following must first be followed as stipulated in Section 15, Incorporation and Organization of Private Corporations: “The original and amended articles together shall contain all provisions required by law to be set out in the articles of incorporation (De Leon 248). Furthermore, Gordon has first to establish these articles according to the process of law: “Such articles, as amended, shall be indicated by underscoring the change or changes made, and a copy thereof, duly certified under oath by the corporate secretary and the majority of the directors or trustees stating the fact that said amendment or amendments have been duly approved by the required vote of the stockholders or members, shall be submitted to the Securities and Exchange commission (249). With this preliminary step, Tony can be advised that before Gordon can proceed with his plan, Gordon must first come up with the required vote of the remaining stockholders or members fore the enactment of the new articles of association.