This chapter explains the statutory requirements with respect to the formation of an LLP and explains the process by which an LLP is incorporated. It explains how, as an incorporated body, an LLP acts through its members and other agents, and how their acts and their potential wrongdoing can be attributed in law to the LLP itself. It addresses the concept of limited liability that is consequent to an LLP's incorporation, and identifies the obligations that are imposed on an LLP arising from limited liability, in terms of registration and publicity.
Chapter
11. The Corporate Structure
Chapter
12. Membership
This chapter explains what membership of an LLP entails. It explains how a person becomes a member of an LLP, and the different types of membership that are recognised in law. It considers case law on the question as to whether a person can be both a member and an employee, and both a member and a worker. Finally, it explains how a person might be disqualified from being a member of an LLP and the consequences of such a person acting as a member whilst disqualified.
Chapter
20. The constituents of a company
This chapter examines the principal constituents who make up and contribute to the success of companies in the UK. The role of the members is discussed, especially their role in corporate decision making. What is a director and the powers of the board of directors are examined, as well as a discussion of the appointment and remuneration of directors. The importance of the company secretary is examined. The chapter than looks at the role of the company’s auditor as well as the liability that can be imposed upon a negligent auditor. Finally, the chapter looks at the position occupied by a company’s creditors and examines how they can protect themselves via taking security, such as a fixed or floating charge over the company’s assets.
Chapter
23. Members’ remedies
This chapter examines the various remedies available to members, especially minority shareholders, who sustain loss due to wrongful acts or omissions. The chapter begins with a discussion of the derivative claim and looks at the rule in Foss v Harbottle, which generally prevents members from commencing proceedings on the company’s behalf. The chapter discusses the exceptions to this rule, and the process for bringing a derivative claim. The chapter then looks at the unfair prejudice remedy and sets out the requirements needed to obtain a remedy. Finally, the most drastic remedy is discussed, namely the ability to petition the court for an order winding up the company on the ground that it is just and equitable to do so. The relationships that exist between these three remedies are also examined.
Chapter
14. The LLP Agreement
This chapter explains what the LLP Agreement does, and what default provisions exist in the absence of agreement. It considers whether a duty of good faith exists within the LLP Agreement. It discusses how an LLP Agreement might be amended, and considers the application of contractual remedies: damages, rescission, repudiation and frustration.
