Motivation And Group Team Working Business Essay

Motivation And Group Team Working Business Essay Molander Winterton (1994, p.3) states that Anyone who has spent time in a number of work organizations will have noticed how the climate differs, the different ways in which things are done, differing levels of energy and individual freedom, and of course, different kinds of people. And The complex mixture of assumptions, behaviors, stories, myths, metaphors (symbols) and other ideas that fit together to define what it means to be a member of a particular society, this view has been supported in the work of Stoner and Freeman (1999, p.181.). Culture is derived from notional context, clearly linked to strategy and determines how strategy can be implemented. In successful organization, there is a strong culture. In 2006, Haier is the worlds 4th largest whitewoods manufacturer and one of China top 100 IT company. In addition, Haier branches in technology research, manufacture industry, trading and financial services with 240 subsidiary companies and 30 design centers, plants and trade companies and more than 50,000 employees around the world. The global revenue was approximately 10,000 million pounds. Nevertheless 20 years ago, Haier was a small state owned company in Qingdao, China and it was losing $178,000 on annual revenues of $421,000. (Haier, 2010) During that period, it had built up its own sales network around world, export more than 160 countries. Meanwhile, Haier just product refrigerators originally, now its product range cover dozens of categories in the domestic electrical appliance market with thousands of individual products. What makes Haier from a small unsuccessful company, which is nearly shut down to an international large-scale enterprise? It is the Zhangs hammer. Zhang Ruimin the CEO of Haier Corporation, he drives and transforms Haier to a global player. Haiers culture, style and operational approach reflect its Chinese traditions and its successes are identified with its key leaders. Haier president Yang Mianmian states her strategy of one low (price), three high (value, growth and quality) it is also cited as a key for Haiers continuing success. A story of Zhang Ruimin that took in a day in 1985, Zhang took a sledgehammer to a row of 76 faulty Haier fridges to the whole workforce who were lined up to watch ( a fridge cost about two years wages in that year). Zhang said: If we do not destroy these refrigerators, what is be shattered by the market in the future will be this enterprise. This hammer is a symbol of Zhangs complete rejection of the previous company attitude that defective products could be tolerated and knocked out at a discount. This story signifies that Haier Corporation is with a strong and distinctive culture. The international strategy of Haier seeks to offer a fast delivery and good service to local market and customers by make maximum use of local labour resources and capital. It is always changing products for the local preferences and habits (as with the wine fridge), a practice that could become costly in terms of complexity and logistics. Haiers global branding strategy aims at standing as a local brand in different market. With the strong Haier culture, Zhang has decided to go for the difficult markets first on the basis that success in these markets would require the company to improve faster than seeking to dominate less fiercely contested markets. Haier has dominated the Chinese market, though Zhang has sought to expand the network through alliances, such as the 2002 agreement with Sanyo, this agreement helps Haier force into Japan market. Haiers strong culture can be seen most clearly in its internal relationships even exporting to other country. Haier built and opened a factory in South Carolina to serve the American market. At first, its methods were strange to the new employees from local labour market. However, according to a report in the Chinese Peoples Daily: à ¢Ã¢â€š ¬Ã‚ ¦both sides have harmonious exchanges, the difference of cultural background, instead of causing estrangement between the Chinese and American workers in their work, has increased their interest in mutual understanding. Initially, the American workers were against to volunteer for overtime to complete the days target work, but the Haier culture motivated them accept the strange work system from China and even prepare for the next days work at Independent Day. Haier seems spread its culture to America. Nowadays, Haier represent as a super brand from China manage to establish and consolidate its position as global brand. As CEO Zhang said: Another challenge unique to China is we have started our brand development late. So we have to catch up in a very short period of time. I will give you an analogy: Its like constructing a 10 story building. Our foreign competitors have already finished all the way up to the ninth floor. The Chinese market is their tenth floor. Once they have moved successfully into the China market, they will be finished with building this high-rise. But in China, we have only built the first floor. There are still nine floors to go. The story recently carried out in the Essentials of organizational behavior by Mullins (2008 cited in Lecture note University of Birmingham Organizational behavior course, 2009). Haier makes culture as a tool of upgrade and powerful company. The aspects of culture can be national, organizational, or interest group, relatively enduring values, beliefs, customs, traditions, and practices commonly shared by a discrete group-defines boundaries between organizations. It also can be transmitted from one generation to the next-conveys a sense of stability and identity. Culture is something larger than individual self-interest, provides standards and control mechanisms. Innovation and risk, attention to detail, outcome orientation, people orientation, team orientation and stability perceived as organization culture separate the high strength employee and low strength employee. The countrys origin effect appears on most global companies that rooted in national business system of their home co untry. Hofstedes analysis has brought up cultural differences in such areas as power distance and uncertainty avoidance, such nationalities as American, British, German/European and Japanese emphasis different approaches to business. Cultures interact with such elements as national business systems, corporate control, management development and human resources management such as COKE, TOYOTA, and UBS. The Business organisation and management lecture given by Dr Peter Foss in November 2009 has shown the definition of motivation is The willingness to exert high levels of effort toward organisational goals, conditioned by the efforts ability to satisfy some individual need. Many factors can influence motivation for example, needs or expectations, behaviour or action, desired goal, frustration or fulfilment and feedback. These make a cycle system, the need or expectations leads to behaviour or action then a desired goal will be set, during the process the blockage will result in frustration, on the contrary get through the blockage will contribute to fulfilment, finally some feedback to needs or expectation. Two differing perspectives are the content theories and process theories. The content theories emphasis what and process theories accentuate how. The content theories identify our needs and strengths; provide the elements of motivation (Spicer, 2010). The Maslow Hierarchy of needs construct by 5 stages, from lowest to highest each stage has its own expectation after reach it, then will move to the next stage. We satisfy needs in the order given: physiological, safety, social, esteem and self-actualisation. After turn to next unsatisfied need, the satisfied need will not be a motivator any more. Meanwhile, lacks of satisfaction will effects physical and mental health. The innate desire to scale hierarchy and self-actualisation stimulates the desire for more. The Hongwu Emperor is one example to interpret this theory. Hongwu Emperor named Zhu Yuanzhang found Ming Dynasty in China, who is an outstanding military scientist and politician. He was born in Pei County in 1328 and he was the youngest of four brothers. His family was difficult to supply basic needs for them and in 1344, the broken dam of Huang River destroyed this poor family, only Zhu Yuanzhang survived. In order to dispense the terrible life condition, Zhu Yuanzhang joined a local rebel group to fight Mongol army. With a strong survivable desire, physical talent and natural leadership ability, Zhu Yuanzhang became a leader in one branch of Red Turban. The Red Turban was mixed brief by Buddhism and Zoroastrianism, the major force against Yuan Dynasty. In the 1356 Zhu Yuanzhang took control of a major city of China, Yingtian (now called Nanjing), he started operate his own policy and built his power prepared for separate from Red Turban in the future. Benefited by Zhu Yuanzhangs splendid talent, he won the largest naval battle, after won and from now on, Zhu Yuanzhang started collecting treasure and jewellery from the people under his rule and built his own palace in Yingtian. He took the rest of China and destroyed Yuan Dynasty in 1366. In the year 1368, Zhu Yuanzhang proclaimed himself Hongwu Emperor. (Buzzle, 2010) From this story, Zhu Yuanzhang followed Maslow Hierarchy of Needs, transfer from physiological to safety when he joined the rebel group, after took control of Yingtian, and he sought for affiliation. When Zhu Yuanzhang proclaimed himself Hongwu Emperor the stage from esteem to self-actualisation. However, the Maslow Hierarchy of Needs theory limited by live condition and level of knowledge. According to the Maslow Hierarchy of Needs Pyramid, the Physiological is the most common need and Self-actualiation is the smallest. It is not suitable for the modern world any more, with the upgrade level of human civilization. Self-actualization cannot stay at the top of Maslow Hierarchy of Needs Pyramid any more, physiological does not the basic need for most people. Theory X Type Theory Y Type People dislike work and want to avoid it Work is interesting, need it for growth Force is needed to get the right effort People will direct themselves to goal People are mostly motivated by money Desire to fulfill ones potential is motivating Most people have little creativity Creativity is available, but widely under used Source: Foss, 2009 The McGregors Theory X and Theory Y show two opposite views of individual. Managers would more support Theory Y, the mental motivators are more effective than substance motivators. The employee with Theory Y mostly will be the top of their own territory, but Theory X cannot. David McClelland learned that employee motivated by the six basic human needs: achievement, power, affiliation, independence, self-esteem and security. (Bratton, Sawchuk, Forshaw, Callinan, Corbett, 2010) The Process theories of motivation focus on the choice of motivator that effect in the period of work. How much effort the worker paid in the specific work depends on the motivator. The three process theories of motivation are equity theory, expectancy theory and goal-setting theory. ( Bratton, Sawchuk, Forshaw, Callinan, Corbett, 2010) Equity Self : Outcomes(100) Inputs(100) Other: Outcomes(100) Inputs(100) Inequity (under-rewarded) Outcomes(100) Inputs(100) Outcomes(150) Inputs(100) Inequity (over-rewarded) Outcomes(150) Inputs(100) Outcomes(100) Input(100) The Equity Theory is defined by ratio of an individuals inputs and outcomes to explain how people utilize the resources and energy to distribute fairness. The balance or imbalance direct influence the satisfaction and motivation of employees. Inequitable reward leads to dissatisfaction, lower output and departure. Equitable reward contributes to continue same level of output. More than Equitable Reward conduces to harder work, discounted reward, higher motivation. Conspicuously, the best way to manage the motivation of employees is a positive reward system. (Bratton, Sawchuk, Forshaw, Callinan, Corbett, 2010) Expectancy theory based on the expectation for the output of employees. Moreover, satisfy the equation: Force of motivation (F) = V (direction) ÃÆ'- I (probability) ÃÆ'- E (expectation), motivation is the product of direction, probability and expectation. The effort affect the performance, performance influence reward, finally the reward decide how much output and expectation. The satisfactions of personal goal approach contribute to a higher passion of employee to the work or research. (Bratton, Sawchuk, Forshaw, Callinan, Corbett, 2010) Goal-Setting theory is the process of motivate employees using goal setting method. A challenging goals lead to higher level of performance, but this hinge on the workers ability, otherwise, will damage the motivation and confidence if the goals cannot be reached. Specific goals conduce to higher value of work than oversimplified goals. An energetic employee in goal setting can improve performance by increasing commitment. Individuals belief of being capable of performing a task assisted by setting goals increases performance. (Bratton, Sawchuk, Forshaw, Callinan, Corbett, 2010) The next topic I chose is Group and Team Working. Group and team are two different conceptions. The Group is two or more people work together, face to face communication and have a common target. Nevertheless, the Team is a group of two or more people who influence and care each other, are acting as one people for common objectives and perceive themselves as a responsible entity with an organisation. (Bratton, Sawchuk, Forshaw, Callinan, Corbett, 2010) Developing from Groups into Teams is one of the managers of organization need to think over. The Team had always better than the Group that is why a group of the world best football players cannot 100% defeats a professional team with unknown players. The task and process approach of transfer group into team have a great deal of aspects: different culture if the members of the group have different nationality or culture background, choose a leader from the group, environment, motivation, resources and power or ability. There may also have plenty of uncertain and complex difficulties. Affiliation and achievement of individual needs of group members, the communicate channels, openness to each other and decision making are foundations of a team. Nowadays, team working is competitiveness, with a high competitive market race, organization required to upgrade its efficiency of work and emphasize the importance of the spirit of team working. Especially when face a large-scale project, the individual cannot finish it by itself, at this point, the age of individualism was end, an outstanding team seems be the main stream of world development. The performance of a team depends on the classification of work team, lower-level teams just make things like self-managed work team similar with a single group, middle-level teams monitor thing like project team but not perfect, the senior-level teams plans and runs things, they drive the project to be real by their steps. (Bratton, Sawchuk, Forshaw, Callinan, Corbett, 2010) To be a high performing team required a common purpose, clear defined goals, psychological, role clarity, mature communication, productive conflict resolution and accountable interdependence. Establish sense of urgency, select members for skill and skill potential, pay attention to first meetings and actions, set clear rules for each member, challenge group frequently, set and seize on a few quick performance oriented tasks, spend lots of time together and use positive feedback. The other important rule is insure psychological safety: equal voice, contribution; everyone participates; attack issues not people; privacy in team discussion. (Foss, 2009) The leader is the core of a team who manage the direction of team approach with an overall consideration. The leader should familiar with the ability and virtue of each member and makes them act best in the suitable position, stimulates the potential of them, strengthens the communication between the team and makes the members feel their importance in the team. The members of team are indispensible for the team, should have the consciousness of team working. Finishing the job of themselves is the responsibility in a team, in additional, the members of team should trust each other. The barriers to team effectiveness like social loafing, risky shift, decision-making, groupthink and common knowledge. A pernicious conflict in the team, especially between the leader and co-leader, this will dissociate the team. In the team, the 1+1 probably not larger than 2. In the 2004 NBA final, the Laker has Shaquille ONeal, Kobe Bryant, Karl Malone, Gary Payton and the coach Phil Jackson versus the Pistons. Everyone believed the NBA most powerful team in the last 20 years would defeat the team without one superstar easily. However, the result was the Pistons defeat the Lakers with score 4 to 1. Actually, Shaquille, Kobe, Karl and Gary they are great basketball players no matter in the league or history, but they are not a team, just a famous group. Kobe and Shaquille not get along well for the team leader, Karl and Gary desire for a champion ring, a team with domestic trouble and foreign invasion cannot call a team. The three topics are from the module organizational behaviour and sociology of work. An abundant knowledge of organizational behaviour helps handle the relationship between employees and managers in the organization and have the positive function to the company development. The first topic is organizational culture, and the first part is the definition about organizational culture. Next using the Haier cooperation as the application organizational example, during the application part connects with the theory of organizational culture. The final part is described the key theory and principles, in addition, the criticisms of the theory and principles in this part either. The second topic is motivation. The first part is explain what motivation is and provides The Maslow Hierarchy of needs theory as the main theory. Using the Hongwu Emperor as the example to explain the maslow hierarchy of needs theory. The following is the criticisms and personal opinion against the maslow hierarchy of needs theory. Finally part is the other key principles and theory. The last topic is group and team working. The first part is same with the other two parts explain the definition of group and team working. Next depict the differences between group and team. The Laker from NBA is the organization to show how to manage a team and the barriers to team effectiveness. The Organizational culture, Motivation and Group and team working are important aspects to an organization. The knowledge of organizational behaviour is art of human relationship in the organization, it is the mental spirit of an organization. A successful management of organizational behaviour not only build a concordant relationship during the employees and managers but also clear the barriers to organization upgrade and performance.

Company Secretarial Practice

Corporate Secretarial Practice Sample paper Suggested answers Important notice When reading these answers, please note that they are not intended to be viewed as a definitive „model? answer, as in many instances there are several possible answers/approaches to a question. These answers indicate a range of appropriate content that could have been provided in answer to the questions. They may be a different length or format to the answers expected from candidates in the examination. Case study Trymore plc You have just joined Trymore plc („Trymore? , a company listed on the London Stock Exchange, as company secretary. This is the first time that a company secretary has been appointed as a separate role in Trymore, as the position had previously always been held by the finance director. Trymore manufactures and sells luxury jewellery and the business has suffered as a result of an economic downturn. Several issues have arisen with certain stakeholders of the company, includi ng unions, shareholders, auditors and the media. The board of directors is very worried about these problems and has convened a special board meeting to discuss what to do.The chairman believes that some of the issues will require input from the company secretary, as a senior member of the company? s management team. You hold a series of meetings with your senior colleagues to find out more about the problems. The matters set out below are discussed with you. Firstly, you hold a meeting with Ms People, the director of human resources. Ms People provides you with an update on a number of matters, including staffing numbers, future wage proposals and relationships between staff, management and the Employees?Union („the Union? ). She also tells you that the Union is concerned about some of the decisions and actions taken recently by the directors and the effectiveness of the board generally. In particular, the Union: ? ? Has accused several directors of planning to â€Å"help th emselves† to the company? s assets, rather than investing the company? s funds into protecting jobs. Is not convinced that many of the decisions taken by the directors recently have benefited the company, particularly in the short-term.Ms People tells you that the company is keen to preserve good relations with the Union, so it will be important to fully address these issues in any dealing with them.  © ICSA, 2010 Page 1 of 16 Several hundred staff were recently made redundant, mainly at the head office, and many of the remaining staff are fearful that they will lose their jobs. The redundancies have even spread to the company secretarial department, where 25% of the staff have been made redundant as part of cost-cutting measures.This has made the workload of the company secretarial department very heavy. You have already explained to Ms People that your staff have complained that they are finding it very difficult to cope and that you fear more staff will resign unless staf fing numbers increase. Ms People tells you that morale within the company seems particularly low. In order to expand the business, the Union understands that the company has recently acquired several overseas companies which have poor human rights records.Staff in the overseas countries are not part of the Union and are cheaper to employ, and the Union is worried that there will be further job losses among their members as a result. The Union is also concerned with the behaviour of Big Holdings plc („Big Holdings? ), the company? s largest shareholder – Trymore is not a subsidiary of Big Holdings. The Union claims that Big Holdings has excessive influence over Trymore, and that Big Holdings? strategy is very similar to Trymore? s regarding the investment into overseas companies.However, Ms People tells you that this approach is the most effective way to reduce the cost of employment. Your second meeting is with Mrs Gain, the finance director and your predecessor as comp any secretary. She summarises the company? s current financial position to you and outlines the key financial priorities for the rest of the year. She also tells you that she is worried that many of the company? s shareholders will be concerned with the company? s external auditors, following an alleged scandal in the press regarding several senior partners of the audit firm.Many clients of the audit firm have announced that they will no longer use them. The company is keen to preserve its reputation and is monitoring developments on this closely. Mrs Gain shows you a copy of the recently received audit letter which refers to a number of company secretarial issues. These centre on the fact that due to the redundancies, and the resulting disorganisation in the company secretarial department, Trymore? s statutory records have not been kept up-to-date, with minutes not being prepared and some statutory filings missed.She is particularly worried that there may be some consequences if th e requirements for statutory filings have not been fulfilled. Nevertheless, she also tells you that she has to balance the need to control costs in the company with the need to ensure that the company adheres to its statutory requirements, and that she will need some input from you and Ms People to help her decide the best way to address this. Your next meeting is with Mr Spin, the director of corporate communications. Mr Spin tells you that Trymore has received a lot of negative media attention recently.This includes a negative article in a newspaper which suggested that Trymore, along with other companies in its sector, was overcharging its customers. The article also attacked Trymore? s environmental record. Relationships with shareholders have also become strained recently. Due to the business suffering, the press has speculated that the company is due to make a loss for the first time. Several of the large institutional shareholders based in the City of London have told the cha irman that the performance of the company needs to improve.The business will also need to communicate to stakeholders further ways to save on costs and/or raise extra funds. In particular, Trymore has a large number of shareholders with small shareholdings and Mr Spin is keen to address their concerns. Shareholders have complained that the company has not done enough to modernise the services it provides to them. Mr Spin has been monitoring internet chat rooms and sees that several shareholders with small holdings are proposing to set up a shareholder action group which will demand improvements in performance and services.Mr Spin is keen to improve relations with shareholders, particularly during this difficult time.  © ICSA, 2010 Page 2 of 16 Questions 1. A meeting has been planned with the chairman of Trymore and the general director of the Union. The Union is expected to make several allegations and the chairman wishes to be well prepared for the meeting. Required Prepare a bri efing note for the chairman, analysing the following: (a) (i) What are the implications of being a shadow director and what steps in general should be taken to avoid any shadow directorships arising? 6 marks) Why might the Union consider Big Holdings to be a shadow director? Assuming Big Holdings is a shadow director, are there any exemptions which may apply? (4 marks) Assuming Big Holdings is a shadow director, what steps need to be taken by Trymore, particularly if Big Holdings is going to continue its level of involvement with Trymore? (4 marks) (ii) (iii) Suggested answer (i) The implications for shadow directors can be onerous. They are liable as every other director and must comply with the provisions of the Companies Act 2006 (CA 2006). Taking into account Trymore? financial difficulties, in the event of an insolvent liquidation the liquidator may claim that Big Holdings was a shadow director of the company. S214 Insolvency Act 1986 deals with wrongful trading of directors in certain circumstances where directors knew or ought to have known that there was no reasonable prospect of a company avoiding insolvency. If the liquidator is able to successfully apply to the court for a declaration that directors contribute to the company? s assets, this would mean that Big Holdings could be joined with the other directors if there is any claim against the directors as part of insolvency proceedings.Shadow directors are also amongst the class of directors that may be disqualified from being concerned in the management or direction of a company, if a finding is made under the Company Directors Disqualification Act 1986 that their conduct in relation to the company? s affairs makes them unfit to be concerned in the management of a limited company. A court of summary jurisdiction may impose a disqualification order for a maximum of five years, or in the case of superior courts, 15 years. The application to the court will be made by theSecretary of State based on a r eport by the liquidator or the Official Receiver into the conduct of the directors of the company. Some practical steps which can be taken to avoid potential shadow directorships arising are: ? ? ? Professional advisers should have a letter of engagement setting out their terms of reference and expressly stating that they are not to be treated as directors of the company. It is good practice to ensure that third parties are made aware that professional advisors are not acting as directors of the company.For Trymore, this could be done by appropriate disclosure in their Annual Report. It would not be appropriate for a representative of Big Holdings to attend board meetings. Page 3 of 16  © ICSA, 2010 (ii) A shadow director can be described as a person in accordance with whose directions or instructions the directors of the company are accustomed to act. A key question will therefore be whether the board of Trymore is independent or whether it has been acting in accordance with Big Holdings? directions.There are some limited exceptions as to who will not be classed as a shadow director but this is generally restricted to professional advisers as their advice is usually limited to a particular part of the business. If Big Holdings has been advising Trymore in this respect of certain investment strategies only then it may well qualify as an exception. However, this seems unlikely. As a good point of governance and disclosure, if Trymore had been reliant on Big Holdings in a way which appears to be material to the company? s strategy, it may have been appropriate to disclose the relationship, for example, in Trymore? Annual Report. (iii) There is no requirement under the CA 2006 to register a shadow directorship at Companies House (CA 2006, s162) and under the 8th Companies Act 2006 Commencement Order, details of shadow directors should be removed from the register of directors interest of companies in existence of 1 October 2009. However, a shadow directorship i s an undesirable position, particularly for a listed company. If Big Holdings is indeed a shadow director and will continue its level of involvement the most appropriate course of action would be to regularise the position.This would include the following: ? ? Disclosing any interests in contracts and so on. Requesting Big Holdings to formalise documentation which appoints a representative to attend board meetings (ensuring appropriate induction arrangements are made if necessary for the company? s representative). (b) On what grounds might the Union allege that the directors of Trymore have breached their statutory duties? What statutory considerations would the directors have against such allegations? How should the chairman ensure that directors are aware of their statutory duties? (11 marks)Suggested answer There are several statutory duties of directors under the CA 2006. Given the Union? s concerns, the most likely allegations which may be raised are the following: ? Breach of duty to exercise reasonable care, skill and diligence (s174 CA 2006) – The Union may claim that some of the decisions made by the directors have not shown the required level of care, skill and diligence in accordance with S174. This is tested in two ways: an objective test of the general knowledge, skill and experience expected of a director, and also a subjective test of the actual general knowledge, skill and experience held by that director.Directors would, therefore, be required to demonstrate that decisions they have taken have met the standards required by s174. Breach of duty to promote the success of the company (s172 CA 2006) – A director is required to act in a way he or she considers in good faith and shall promote the success of the company for the benefit of its members as a whole. CA 2006 provides a nonexhaustive list of factors which directors should take into account when considering this duty. Directors would, therefore, need to show that they have ta ken one or more of the stipulated factors into account or any other relevant factor. One key consideration here on which the directors may rely is the likely consequences of decisions over the long-term. It may be the case that the impact of decisions are detrimental over the short-term (such as redundancies) but are designed to be of benefit for the long-term. A further consideration is that there may be „competing? factors which the directors need to take into account when considering which particular action or actions will promote the success of the company.  © ICSA, 2010 Page 4 of 16The best way to ensure that the directors are aware of their duties is through a process of induction and ongoing education. The newly appointed company secretary will have a pivotal role in this. As a newly appointed company secretary, through discussion with the chairman, a â€Å"sense check† should be taken as to the directors? awareness of their duties. The Combined Code recommends that the company secretary, in conjunction with the chairman, takes responsibility for ensuring the appropriate induction of a director.Before a director accepts an appointment, the secretary should ensure that he or she is fully aware of their responsibilities, duties and potential liabilities. This includes, in particular, their statutory duties as required by the CA 2006. The company secretary usually decides, in conjunction with the newly appointed director on the best way to deliver the induction, which may take the form of presentations, attendance at seminars or providing guidance books. Following induction, the company secretary should take responsibility for the ongoing briefing and refresher training of directors at appropriate intervals. . You have serious concerns about the issues regarding the statutory registers, statutory filings and auditors: (a) (i) You discover that no action has been taken in respect of the following: ? ? ? The Annual Return date for Trymore was two weeks ago. Your appointment as company secretary was three weeks ago. A shareholder requested minutes of the last Annual General Meeting (which was held two months ago) but no minutes have yet been prepared. Explain if there are any statutory or regulatory implications in respect of the above and any required timescales. 10 marks) (ii) Explain, in a memorandum to the finance director, why it is important for the company to promptly file all required returns with the Registrar of Companies and the implications of failing to do so. (4 marks) (b) The directors would like to know what the liability of the auditors to the company is, in relation to their auditing of the company? s accounts. The directors are concerned that the auditors may seek to limit their liability and wish to know whether it is permitted under company law and what procedures would be involved for this.The directors expect shareholders to be concerned about the alleged scandal regarding the auditors and have aske d you if there are any provisions of the Companies Act 2006 which enable shareholders to take action in this regard. The directors also ask you if there are any disclosure issues which the company would need to take into account regarding the position of the auditor. (11 marks) Required Prepare an appropriate briefing note for the directors in respect of (a) and (b) above. (Total: 25 marks)  © ICSA, 2010 Page 5 of 16Suggested answer (a) (i) ? Statutory filings and registers Annual Return date – The Annual Return must be submitted to Companies House within 28 days of the Annual Return date, together with the associated filing fee. Trymore is not, therefore, overdue and has two weeks to file the return. Appointment of company secretary – Public companies are required by s275 CA 2006 to maintain a register of secretaries and by s276 to notify the Registrar within 14 days upon the occurrence of any change in the particulars contained in the register.It is, therefore, goo d practice to update the register of secretaries without delay and a statutory requirement to notify the Registrar of Companies within 14 days of such an event. Trymore is, therefore, one week overdue. Pursuant to s276, if default is made in complying with this section, an offence is committed by every officer of the company who is in default. Furthermore, as a listed company, there is a regulatory requirement to issue an announcement via a Regulatory Information Service in respect of the appointment.This should have been done, at the latest, without delay following the appointment and is, hence, considerably overdue. AGM minutes – As a core function of the company secretary, it is good practice to prepare minutes promptly following a meeting. Moreover, s355 requires every company to keep minutes of all proceedings of general meetings. If the minutes have not been prepared, it is likely that any resolutions which need to be filed at Companies House have not been filed either. Such resolutions must be filed within 15 days of the meeting and, hence, are overdue.In addition, s358 entitles any member to request (subject to any applicable fee) a copy of the minutes of general meetings and such copies must be provided within 14 days of receiving the request. ? ? The situation must, therefore, be addressed without delay in respect of writing the minutes, sending the minutes to the shareholder and making any necessary filings with the Registrar of Companies. In general, if a company fails to comply with the above requirements, an offence is committed by every officer of the company who is in default. (ii) Filing returns with the Registrar of CompaniesIt is important for the company to promptly file all required returns with the Registrar of Companies for a number of reasons. Firstly, the CA 2006 makes directors of the company liable for failing to file required documents. This could damage the reputation of both the director and the company and, in extreme case s, persistent failures to file could lead to the disqualification of one or more directors. Secondly, part of the assessment of a company by stakeholders (such as credit reference agencies, suppliers and prospective customers) will include a review of documents lodged at Companies House.If it is clear that the company is not adhering to its statutory requirements, this may discourage third parties from doing business with the company. Lastly, a failure by a company to file accounts, annual returns or respond to a communication from Companies House could result in strike-off action by Companies House. The directors would, therefore, be strongly advised to ensure that the company secretarial function is appropriately resourced to ensure that the company is able to comply with its statutory obligations.  © ICSA, 2010 Page 6 of 16 (b) Liabilities of the auditor and shareholder concernsAuditors are required to act honestly and with reasonable care and skill in discharging their duties. An auditor is liable to the company for any loss resulting from negligence or default in the performance of his or her duties. As an auditor? s liability is unlimited, this has led to concerns in recent years that an audit firm could go out of business were it to be found liable in a court. The CA 2006, ss534-538, introduces the possibility that the liability of auditors may be limited. However, this is not a unilateral decision by the auditor and would need to be agreed with the company.Any such attempt to limit liability would be in relation to the specific financial year and would need the approval of the company? s shareholders by ordinary resolution, following approval by the board. The details of the limitation would be set out in a formal liability limitation agreement, which can reduce the extent of liability to no less than such an amount or proportion which is fair and reasonable, taking into account the auditor? s responsibilities and contractual obligations and the prof essional standards expected of them.In respect of likely shareholder concerns, as Trymore is a public company, it is required to propose a resolution at each Annual General Meeting (AGM) in respect of the re-appointment of the auditor. If shareholders are concerned about the suitability of the auditor, the most obvious action would be for shareholders to vote against the resolution. The appointment of the auditor would, therefore, come to an end at the end of their term. CA 2006 s527 also gives shareholders of a quoted company the right to have a statement placed on the company? website ahead of a general meeting at which the accounts are to be considered. However, the statement must only be in relation to the audit of the accounts or any issue surrounding an auditor who has ceased to hold office. In order for the statement to be placed on the company? s website, it must be requisitioned by members representing at least 5% of the total voting rights or by 100 members holding paid up shares on average sum per member of not less than ? 100. As a listed company, the directors should be alert to any likely problems which could damage the company? s reputation and should have a plan to deal with it.The company should, therefore, create a prepared response on the company? s position in relation to the auditors which could be released if required. In addition, the Listing regime requires all circulars to shareholders to carry the necessary information to enable shareholders to make an informed choice if a voting action is required. The notice of AGM must, therefore, have a clear recommendation as to whether the directors support all of the resolutions, including the resolution on the re-appointment of the auditors.  © ICSA, 2010 Page 7 of 16 3. You learn of some new developments with regard to the company? relationship with its shareholders: (a) The directors inform you that press speculation is indeed correct and that, due to a sudden change in trading, the compan y is expected to make a loss for the first time. They ask you what disclosure issues arise, why such issues arise and what actions should be taken. They also ask you to explain the process by which listed companies must disclose information. (12 marks) Mr Spin notes that the company does not send Summary Financial Statements (SFSs) to its shareholders and that this could be one way in which the company modernises its shareholder services.Mr Spin asks you to prepare a note for the board explaining the following: (i) What SFSs are and why companies might wish to send them to shareholders. (4 marks) What statutory process and procedures a company must follow prior to issuing SFSs to shareholders. (3 marks) What key information must, at a minimum, be included in SFSs and how the SFSs should be approved. (6 marks) (b) (ii) (iii) Required Prepare a briefing note for the directors in respect of (a) and a note for the board in respect of (b), above. (Total: 25 marks) Suggested answer (a) Di sclosure issues regarding trading conditionsListed companies must observe various continuing obligations, as set out in Listing Rules and in the Disclosure and Transparency Rules (DTR). Continuing obligations are designed to ensure a fair market, with equal access to information by all parties and help to reinforce the importance of a properly regulated market and thus help to increase investor confidence. A cornerstone of this is the prompt release of material information to the market. Any change in the company? s expected performance which is materially different from the expectation of the market must be promptly disclosed.This includes a profit warning that the company does not expect to achieve the level of profit it had previously achieved in a given financial period. Time is of the essence, as the Financial Services Authority (FSA) are likely to investigate the time period between the directors becoming aware of the expected change in trading expectation and the release of a n announcement about it. Any unwarranted delay in releasing the information is likely to lead to the creation of a false market which is contrary to the Listing Principles and, in extreme cases, could lead to accusations of market abuse.The directors would, therefore, be strongly advised to convene a board meeting without delay and to consult with its advisors on the preparation and the urgent release of an appropriate announcement to the market. The DTRs provide guidance on the release of information to the public. Companies must submit announcements to a Regulatory Information Service (RIS), which is a primary information provider (PIP) service approved by the FSA, to disseminate regulatory information to the market. Information which needs to be notified to a RIS must be given to them before being released  © ICSA, 2010 Page 8 of 16 lsewhere to ensure that no one person or section of the population receives the information ahead of any other. If a RIS is closed and a company ha s information to disclose, the company must distribute it to at least two national newspapers and to two newswire services to ensure that there is adequate coverage. A RIS should also be informed so that it can release the news as soon as the market reopens. The underlying principle in the DTRs is that important information must be released to the market as promptly as possible and, in any event, usually by the end of the following business day.The DTRs further require that once an announcement has been released to a RIS it must also be posted on the company? s internet site by the close of the business day following the day of announcement and must be kept there for at least one year. (b) (i) Summary Financial Statements SFSs are, as the name suggests, a summary version of the full accounts of a company. All companies may choose to issue SFSs to shareholders instead of the full accounts (CA 2006, s426). In addition to sending SFSs in hard copy, SFSs may be made available electronic ally, for example, on a website or sent by email to those who have requested it.This would meet some of the concerns of shareholders that the company has not modernised its services to them. SFSs are a useful tool in promoting effective shareholder relations. SFSs avoid overwhelming private investors with detailed and complex annual accounts. It also saves companies with large shareholder bases substantial costs in printing and posting annual accounts. This is useful as Trymore is looking for ways in which to save costs. (ii) Before a company may send SFSs to its shareholders, it must ascertain the wishes of members regarding the receipt of full accounts.The company must have ascertained that the shareholder does not want to receive the full accounts. This may be accomplished by sending the shareholder a reply-paid card which requests the shareholder to opt-in to receive the full accounts. If the shareholder fails to reply, it is assumed that the shareholder is willing to receive th e SFSs. (iii) ? The SFS to be prepared for the financial year for Trymore must include the following (as stipulated in the CA 2006, ss427-428 and regulations made under those sections): a summary profit and loss account (including earnings per share information); ?A summary balance sheet (statement of financial position). ? A summary directors? report. ? Paid or proposed dividends. ? A report by the auditors. ? A report on directors? remuneration. The SFS must also contain a statement that it is only a summary of the full accounts and that the summary accounts do not contain sufficient information to allow a full understanding of the company. It must also provide shareholders with details of where the full accounts may be obtained (free of charge). In addition, to provide additional comfort for shareholders, the SFS must contain a statement by the company? auditors of their opinion that the SFS is consistent with the full accounts and complies with the CA 2006. As with the full acco unts, for good governance, the SFS must be approved by the board. The SFS is signed on the board? s behalf by a director whose name must be stated on the copies issued to shareholders. In seeking the board? s approval, the board will need to confirm that the SFS is indeed a true summary of the full accounts.  © ICSA, 2010 Page 9 of 16 4. The directors strenuously deny that they are planning to â€Å"help themselves† to the company? s funds.The following transactions are intended to take place between the directors and the company: (a) The company plans to provide loans and credit transactions to two directors. Firstly, Mrs Gain, the finance director, will receive a loan of ? 8,000 for the purposes of buying a new car and separately will receive a loan of ? 18,000 (repayable next year) so she can buy jewellery from the company at market price. Secondly, Mr Sell, the marketing director, will receive a loan of ? 40,000 which he will use to clear personal debts as he was in sev ere financial difficulty. 12 marks) The company also has plans to participate in property transactions with the directors. The company intends to purchase Mrs Gain? s old car for ? 4,000. Mrs Gain has pointed out that the car is registered in her husband? s name, and he is not a director of the company. The company also plans to purchase, for development, a plot of land owned by Mr Sell in exchange for ? 115,000, plus the allotment of 20,000 shares in the company. Each transaction is intended to be at market value. (13 marks) (b)The chairman has asked you to provide advice as to whether each of the above transactions are permitted under the Companies Act 2006 and, if so, what approvals, procedures and disclosures need to be made. The chairman has also asked you if Mr Sell? s financial difficulties raise any issues under statute or the company? s Articles of Association. Required Prepare the responses required in (a) and (b) above. (Total: 25 marks) Suggested answer (a) Loans and cre dit transactions Under the CA 2006, companies may make loans or credit transactions to directors.This is provided there has been prior approval by ordinary resolution of the members. In order for approval to be given in general meeting, there needs to be full disclosure in advance by including the following information in a memorandum: ? ? ? The purpose of the loan or transaction. The amount of the loan or value of the transaction. The liability to which the company may be exposed under the loan or transaction. Where the resolution is to be passed in a general meeting, the memorandum must be available for inspection at the registered office for at least 15 days ending with the date of the meeting.It must also be available for inspection at the place of the general meeting. Shareholder approval is not required where loans or transactions are in respect of small amounts. The relevant exceptions where shareholder approval is not required are: ? ? ? Loans or quasi-loans up to ? 10,000. Up to ? 15,000 for credit transactions under which the director acquires goods from the company on deferred payment terms. To enable a director to meet expenditure incurred for the purpose of the company? s business to enable him to perform his duties.The aggregate amounts outstanding must not exceed ? 50,000. Page 10 of 16  © ICSA, 2010 Taking the above into account, the loan to Mrs Gain does not require approval by shareholders, approval by the board is sufficient. Mrs Gain should declare an interest and should be excluded from the quorum and the voting in respect of the board? s approval of the loan. However, the ? 18,000 loan to Mrs Gain and the loan to Mr Sell require shareholder approval before they can be made. This is because the ? 18,000 loan is a credit transaction above ? 15,000 in exchange for goods by the company and the ? 0,000 loan is above the exemption allowed under the CA 2006. If the directors concerned also hold shares they should refrain from voting in a gener al meeting on any approval as each is a conflicted related party. (b) Property transactions and Mr Sell? s financial difficulties The CA 2006, ss190-196, sets out the provisions in respect of substantial property transactions between a company and a director. The term â€Å"director†, for the purposes of substantial property transactions, includes connected persons to the director and this would include Mrs Gain? husband. Hence, the transaction in respect of the car needs to be considered. Generally, a company may not transfer to a director, or a director to a company, a non-cash asset (for example, property) if its value exceeds 10% of the company? s net assets and is more than ? 5,000, or if the value exceeds ? 100,000, unless approved by the company in general meeting. No shareholder approval is required if the value is less than ? 5,000. Taking the above into account, the purchase of the car is a property transaction as it is with a connected person to the director.Howeve r, as is it for less than ? 5,000, no shareholder approval is required. As with the loan for ? 8,000, board approval is all that is required and Mrs Gain should declare an interest and should be excluded from the quorum and the voting in respect of the transaction. However, the purchase of land does require shareholder approval as the value exceeds ? 100,000. If the director concerned also holds shares, he should refrain from voting in a general meeting on any approval as he is a conflicted related party.It is noted that the company intends to acquire the plot of land for cash and shares. The CA 2006, ss593-597, provides that a public company may not allot shares either fully or partly paid up for a payment other than cash, unless the consideration has been valued by an appointed valuer within the six months prior to the allotment, and a copy of the valuation sent to the proposed allottee. The valuation report must be made by an independent person who would be qualified to be an aud itor of the company. The valuer? s report must state: ? ? ? The nominal value of the shares being allotted for a consideration other than cash. The amount of any premium payable on the shares. The consideration which has been valued and the method used to value it. The amount of the nominal value of the shares and any premium treated as paid up for a consideration other than cash. A copy of the report should be sent to the Registrar of Companies when the return of allotments form SH01 is filed (CA 2006, s597) together with a formal contract for the transfer of the plot of land.As the transaction is with a director and requires shareholder approval, adequate disclosure must be made in the circular sent to shareholders and documents must be made available for inspection in a similar way as for the arrangements for loans, as described above. Mr Sell should also refrain from participating in any board approval on this matter. Questions need to be asked about Mr Sell? s personal financia l position as this may impact his ability to continue to serve as a director.Public company Model Article 22 provides that a director would cease to be a director as soon as a bankruptcy order is made against that person or if a composition is made with that person? s creditors generally in satisfaction of that person? s debts. In addition, if a director becomes bankrupt after appointment, section 11 of the Company Directors Disqualification Act 1986 provides that his position will be resigned unless the courts give permission for him to continue.  © ICSA, 2010 Page 11 of 16 5. You are a Chartered Secretary in private practice. John Smith is a shareholder in Pots plc („Pots? , a company listed on the London Stock Exchange. Mr Smith tells you that he and many other shareholders of Pots, who hold between them 7% of the issued share capital, are unhappy with the way the company is being run and wish to put forward some proposals of their own for consideration. Mr Smith asks you to prepare a report giving your professional advice on the following: (a) How can shareholders of a company: (i) assert their rights by requisitioning a general meeting; and (ii) add a resolution to the agenda of the next Annual General Meeting (AGM) of Pots?Mr Smith would like to know the applicable statutory procedures and timescales, what documents would need to be produced and in what format, any related costs, and what information would be circulated and disclosed. (16 marks) Once the general meeting/AGM has been held, how will Mr Smith and his associates know the result of their proposed resolution? What steps are available to Mr Smith and his associates if they are not satisfied with the way any vote at a general meeting/AGM has been conducted? 9 marks) (b) Required Prepare the report required in (a) and (b) above. (Total: 25 marks) Suggested answer Advice for Mr John Smith – Pots plc I refer to our recent discussion regarding Pots plc and I provide below the informat ion that you requested. (a) (i) Requisition of business at general meetings Requisition of a general meeting Under s303 of the CA 2006, members holding not less than 10% of the paid-up capital may requisition the directors to hold a general meeting.As you and your colleagues only hold 7% of the capital, you do not have sufficient shares to requisition a meeting. You must, therefore, either find further shareholders who are willing to support your requisition (holding at least 3% of the share capital) or you may wish to consider waiting until the next AGM and add a members? resolution at that time (see below). The requisition may be in hard copy or electronic form and must be authenticated by the persons requesting it.On receipt of the requisition, the directors of Pots plc must convene the meeting within 21 days, and the meeting must be held not more than 28 days after the date of the notice of the meeting (CA 2006, s304(1)). The cost of convening the general meeting is met by the c ompany. In practice, if convening a meeting, the directors would circulate the notice to the members with a letter explaining the circumstances in which the meeting was being called and state whether or not they supported the proposals to be considered.This is good practice generally for shareholder relations. Also, it is particularly relevant for listed companies as the Listing Rules require any circular sent to shareholders of a listed company to contain a clear and adequate explanation of its subject matter, including enough information for shareholders to be sufficiently informed when voting or taking other actions. As Pots plc is a listed company, it will be required to issue a regulatory announcement without delay disclosing that shareholders have  © ICSA, 2010 Page 12 of 16 requisitioned a general meeting.This is necessary as the public are potential investors and need to be informed of all material events affecting Pots plc. You should note that the directors of Pots plc c annot simply ignore the requisition. CA 2006 s305 provides that if the directors do not comply with the requisition, the requisitionists, or a group representing more than 50 per cent of the voting rights of all of them, may convene the meeting at any time within three months from the date of deposit of the requisition. As far as possible, the meeting should be convened in the same manner as would be done by the directors.This will also be at the expense of the company. (ii) Adding an item of business to the next AGM In addition to the ability of shareholders to requisition a general meeting, shareholders as owners of a company have the right to add their own items of business to the agenda of a forthcoming AGM. As you and your associates do not hold 10% of the share capital of Pots plc, this may provide an alternative route for you. CA 2006, s338 provides that one or more shareholders holding at least 5% of the fully paid up voting capital may requisition an item of business at the next AGM.Hence, you and your associates hold sufficient shares to take this course of action. However, you will have to wait until the time of the AGM. In respect of timescales, the requisition must be lodged not less than six weeks before the date set for the meeting, but if the meeting is subsequently set for sooner, the requisition is deemed as being validly served. The procedure is to deposit the signed requisition(s) (stating the object(s) or including any supporting statement) at the registered office. This may be in hard copy or electronic form.As with requisitioning a general meeting, the board is likely set out in the notice the circumstances in which the resolution has been added and whether or not they support the proposals. Timing is critical in this matter. In respect of costs, if the request is received before the end of the financial year preceding the meeting, the costs of circulation must be met by the company (CA 2006 s340(1)). If the request is received later, it must be accompanied by an amount to cover the expenses of circulation. If not, the directors are not obliged to circulate details of the resolution or any accompanying statement.CA 2006, s314 allows members to request circulation of a statement of up to 1,000 words which relates to a resolution to be proposed at any general meeting or to other business to be dealt with at the meeting. The number of members required is the same as for requesting a resolution to be put to an AGM. However, the request under this section need only be received one week before the meeting. (b) Voting results of a general meeting All shareholders will be able to find out the result of the resolutions passed at a general meeting.You should note that the Listing Rules provide that the result of any resolutions passed at general meetings must be released via a regulatory information service. In addition, the Combined Code (which is the corporate governance code which applies to listed companies) requires tha t where a resolution has been passed on a show of hands, the chairman of the meeting should inform the meeting of the proxy votes lodged, even if a poll vote has not been called and that the proxy votes lodged should be published on the company? s website.Shareholders have the right to ensure that any poll vote taken at a general meeting has been conducted appropriately. CA 2006, ss342-351 has provisions to allow shareholders to require an independent report on a poll vote taken at any general meeting. Members holding 5% of the voting rights may require the report, so the shares held by you and your associates will be sufficient to make this demand. The requisition must be received by the company no later than one week after the poll has been held. On receiving such a request, the directors have to appoint an independent assessor within one week.The assessor? s report must state whether, in his opinion: ?  © ICSA, 2010 The procedures for the poll were adequate. Page 13 of 16 ? ? ? The votes cast were fairly and accurately counted and recorded. The validity of proxy appointments was fairly assessed. The company complied with legal requirements regarding the appointment of proxies. Again, open disclosure is key and all shareholders will be able to find out the result of the independent assessor? s report. Under s351 CA 2006, the company must publish on its website the fact that an independent assessor has been appointed and who the assessor is.Once the report is produced, this must also be put on the website. 6. You are the board secretary to Westshire University („the university? ). Dr Smart informs you that the science department has produced an invention which has the potential to earn revenue for the university. You note that it is against University policy to operate public limited companies. Professor Witty has told you that an old student of the school has made a large donation and wishes this to be used for charitable purposes or to benefit the l ocal area through community enterprises.Both Dr Smart and Professor Witty are keen for these ideas to be carried out by companies which are separate entities from the university but they wish the university to retain some control. (a) Prepare a report for the next board meeting of the university, setting out the steps, procedures, documentation and other matters to consider which are required to incorporate a company. Professor Witty and Dr Smart? s considerations, as set out above, should be taken into account. 15 marks) Prepare a report for the next board meeting, setting out the reasons why both a company limited by guarantee or a community interest company may be suitable for Dr Smart and Professor Witty? s proposal. The report should include any additional relevant information on the formation, purpose, liability or winding up of each type of company and any board approvals which may be appropriate. (10 marks) (b) Required Prepare the responses required in (a) and (b) above. (T otal: 25 marks) Suggested answer Westshire University To: From: Re: The board The secretary Formation of new companiesI refer to the recent discussions with Dr Smart and Professor Witty and, as promised, I provide further advice below on the discussions. (a) Process for incorporating a company The CA 2006 provides the process by which a company may be formed. This will allow the ventures proposed by Dr Smart and Professor Witty to form a separate entity to that of the University. As such, it will also have its own obligations, for example, disclosure obligations and a requirement to comply with all applicable statutes.  © ICSA, 2010 Page 14 of 16In order to form a new company, there must be at least one person or company which agrees to its formation. This is known as the subscriber who agrees to take at least one share in the company or, for a company limited by guarantee, acts as the guarantor. For governance purposes, the board should, therefore, resolve that the new companies be formed. All companies are required to have a set of Articles of Association, which are rules to govern the internal affairs of the company. It is usual to adopt the Model Articles, which are default Articles which apply to the running of most companies.To the extent that these are suitable, we can make any specified modifications. Again, for good governance, the board should approve the Articles. Each company needs a unique name which is appropriate for the business. This can be done by checking the proposed name of the companies against the index of company names held by the Registrar of Companies. Any proposed company name which is the same as, or „too like? , the name of any existing company, or otherwise objectionable (see below), will be rejected by the Registrar of Companies. In addition, there are also some â€Å"sensitive† ords which, if included in a name, require approval to be obtained in advance before we are able to use it and this should be factored int o the timescale for forming the company. There are a number of forms which must be completed in order to complete the company formation. Completing these forms will also assist in determining what other steps and actions are required as part of the formation. Form IN01 is the main incorporation document required. It contains all the details to enable the incorporation of a company. Key considerations for the board to approve include the following: ?What will be the address of the registered office and respective jurisdiction (for example, England and Wales)? The registered office address must be within the respective jurisdiction. Who will be the first director(s) and secretary(ies)? The board will need to consider the most appropriate person given the required responsibilities of the directors. In addition, for good governance and to retain some control, the board may wish to appoint someone from the University to ensure good governance and a reporting line into the University. A c ompany secretary is not required.However, this may well be useful to ensure that statutory compliance is being fully observed. The board will need to decide to what extent the company will be capitalised and who will own the shares, if it is limited by shares. For example, the company could be a subsidiary of the University in order to retain some control of the company. The details of the initial shareholders must be disclosed as part of the formation process. Form IN01 contains a Memorandum of Association, which is the request by one or more person to form a company.Every subscriber to the Memorandum of Association must sign a statement of compliance which is contained within the form. The statement confirms that the subscriber has complied with the requirements of the CA 2006 in respect of registration. ? ? ? The registration documents must be accompanied by the applicable registration fee. If all is in order, the Registrar of Companies will issue a certificate of incorporation. This is effectively the „birth certificate? of a company. Details of the company are disclosed and made available to the public via the Registrar of Companies? website. b) Companies limited by guarantee and Community Interest Companies (CICs) In a company limited by guarantee, the liability of the members is limited to the amount that they undertake to contribute to the assets of the company if it is wound up. Companies limited by  © ICSA, 2010 Page 15 of 16 guarantee are usually low risk entities such as charitable or not-for-profit organisations and would, therefore, be appropriate for the separate entity required to administer donations from former students. In a company limited by guarantee, members are not required to provide funds on becoming a member.However, upon incorporation, it will be required to submit a statement of guarantee that it is to be limited by guarantee. The statement must contain such information as required so that the subscribers to the Memorandum of Association can be identified (CA 2006, s11). It must also state that each member undertakes that, if the company is wound up while he is a member, or within one year after he ceases to be a member, he will contribute the specified amount towards the debts and liabilities of the company.The liability of the members in the event of insolvent liquidation is limited to the guarantee, usually fixed at some low nominal value, such as ? 1 per member. As there is little commercial risk to the business, a company limited by guarantee would, therefore, be an appropriate vehicle for the University. The Companies (Audit, Investigations and Community Enterprise) Act 2004 introduced the Community Interest Company (CIC). The purpose of a CIC is to encourage the provision of products and services which benefit the social and environmental regeneration of wide sections of local communities.Any profits generated from CICs must, therefore, be used for the public good. Companies wishing to qualify for CIC status are required to satisfy the community interest test that „a reasonable person might consider that its activities are being carried on for the benefit of the community?. The expectation is that the CIC will help to meet the need for a transparent, flexible model, clearly defined and easily recognised. The surplus assets of a CIC on transfer or winding up must be applied only to similar organisations or for charitable purposes. A CIC may be incorporated as a company limited by shares or limited by guarantee.In addition to the usual incorporation documents, directors are required to sign a statement which confirms that the CIC will only be used for public good purposes. Given that there will be some risk in forming any company, for good governance and to show acknowledgement of a required decision, the board should pass a formal resolution to approve the incorporation of either a company limited by guarantee of a CIC. The scenarios included here are entirely fictio nal. Any resemblance of the information in the scenarios to real persons or organisations, actual or perceived, is purely coincidental.  © ICSA, 2010 Page 16 of 16

Civil V Criminal Law

English law is made up primarily of Civil and Criminal Law. Civil Law is concerned with the the Laws of Tort and Contract. Civil law can be defined as that area of law which is concerned with private disputes that occur between individuals or between individuals and organisations and where a proceedings in court is initiated by the aforementioned. In contrast, criminal law seeks to punish those that has done wrongs against the community. For example, a person who decides to take the life of someone else commits murder. The community by way of its government has a duty to protect itself from being murdered. The result is Criminal Law which is enforceable by the State and initiated by the Police. Therefore criminal law is said to protect the community and punishes those that breaks the law with a fine, imprisonment or community sentences. Whereas, civil law seeks to compensate party who has suffered wrong. Civil law covers many areas of everyday daily life, most notable are domestic relations law like divorces and child custody law, probate like wills and estates, employment like agency and working hours laws, and personal injury law. Under pining those laws are Tort and Contract Law. A high level definition of tort law is that it deals with wrongs or injuries inflicted on one party by another and usually the parties involved are unknown to each other until something occurs which results in the tort action. Contracts on the other hand deals with the roles, relationships and obligations of parties that are engaged in a formal agreement. Under civil law an example of tort is acts of carelessness, or failure to act which result in injury or loss to another person. An example is a driver who fails to drive properly and as a result of that failure injures a pedestrian. This incident can give rise to negligence which is the failure to take reasonable care to avoid injury or loss to another person. However in order to prove a negligent claim, it must be proved that there existed a duty of care on the driver to not cause harm to others. The test of this duty of care is that the court will need to determine that a reasonable person would expect that a certain result might follow from an action. Therefore, by not driving properly the driver mounts the pavement and hits the pedestrian, if the result is foreseeable for a reasonable person, then liability may be imposed for the action. In comparison, contract law is an agreement between two persons where one binds himself, with respect to the other, to give something or to render some service. As such, a contract is said to be binding with obligations, and if not met, may lead to an action in civil court. For example a plumber hired to undertake the repair of a leaky facet has entered into a contract to repair the leaking facet in exchange for payment, if he fails to repair the facet within the terms of the agreement, there might not be any obligation to pay him as the terms of the contract has not met. To conclude, civil law covers several area of laws and is primarily concerned with private individuals or companies. The use of the term civil law as a blanket term to cover tort and contract is not confusing as the actions undertaken by the individuals will be indicative of the area of the law that is applicable. The principles are distinguishable, tort usually involves persons who have not entered into a contract or a formal relationship whereas contracts are legally binding agreements established by two or more persons. Where there might be a blurring of the distinctions is where there arises a case of tort while undertaking a contract. Such as an accident in the workplace where there exist a contract of employment. Bibliographies â€Å"Civil Law† Directgov http://www. direct. gov. uk/en/CrimeJusticeAndTheLaw/Thejudicialsystem/DG_4003097 â€Å"Criminal Law† Directgov http://www. direct. gov. uk/en/CrimeJusticeAndTheLaw/Thejudicialsystem/DG_4003097 â€Å"Tort† Stanford University http://plato. stanford. edu/entries/tort-theories/

The Code Of The Honor Code - 1303 Words

Rules and regulations have always been necessities within the society, especially in the educational system; however, similar to the way we enforce rules to improve the students’ actions, we must provide standards that ethically better the students. By forming our own perspective on the honor code, acknowledging that the efficiency of the honor code relies on the student bodies’ compliance to the expectations, and relating the honor code to free will, we have come to the conclusion that the present honor code in our school, Robert Vela High School, needs to be revised. The solution is quite simple, separate the rules and create a new honor code that comprises of expectations excluding severe repercussions. Humans possess a nature of†¦show more content†¦It is true that many students may not do what is right in every situation, but everyone has a conscience and will know that they failed someone in the process of their wrong doings. In the same way that American citizens say the Pledge of Allegiance to honor the United States, schools should too â€Å"...[pledge]...never to lie, cheat or steal† in order to allow the students to feel as if they are trying to keep a promise rather than simply following a guideline (Source D). Overall, the honor code should be seen as a moral expectation and not an ordinary combination of directives. The most crucial part of establishing an effective honor code is to acknowledge that the students are the ones who determine the level of its efficiency. Within the school system, there are always rules that must be followed; however, a portion of the student population will not obey them. The honor code needs to be separated from the rules in order to establish a set of standards that are a necessity to build the â€Å"...type of environment [we] want to live in†(Source B). The culture of the students is the enabler for the success of the honor code. Fundamentally, the honor code should be the expectations that establish the setting of the school. Within schools today, there are many situations in which a student is required to do an assignment in order to receive a passing grade. To many this would urge them to complete the task, but to othersShow MoreRelatedThe Honor Code1348 Words   |  6 Pagescosmopolitanism which can be applied more broadly to societies than to in dividuals. In his book, The Honor Code, Appiah offers various examples about the connected roles which shame and honor have respectively in guiding the morality of different cultures, and how these influences change over time through external forces which evaluate and judge the practices of that particular society. The reason he gives for honor having enough weight to influence behavior to such an extent is â€Å"our deep and persistent concernRead MoreThe Code Of The Honor Code System790 Words   |  4 PagesThe honor code is a set of rules used by high schools and colleges to prevent the students from cheating, stealing and plagiarizing. The honor code puts the responsibility of maintaining academic integrity on the student’s shoulders instead of those of the faculty. Ideally, this code works well because the students are trusted, monitored and held accountable by their peers. Unfortunately, in reality the honor code is not successful and actually allows for more cheating . 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They achieved this by acquiring a kleos; establishing fame, glory and a positive reputation. It was not an easy task to become a Grecian hero. Building and maintaining kleos meant that a warrior must be brave and strong, be â€Å"a speaker of words and a doer of deeds.† The solider had to protect his friends and harm his enemies, respect the gods and his elders, and most of all value his honor over his life. To die in battle, and be spokenRead MoreThe Code Of Honor In The Iliad And The Odyssey1684 Words   |  7 Pagesthe code which administers the conduct of the Homeric heroes is a straightforward idea. The aim of every hero is to achieve honor. Throughout the Iliad and the Odyssey, different characters take on the role of a hero. Honor is essential to the Homeric heroes, so much that life would be meaningless without it. Thus, honor is more important than life itself. Throughout the Iliad, heroic characters make decisions based on a specific set of principles, which are referred to as the â€Å"code of honor.† TheRead MoreThe Atomic Bomb : A Code Of Honor1373 Words   |  6 Pagesbomb. The atomic bomb was created to try and stop the World War Two. The people of the United States greatly did not want to use the bomb to end the war. The American citizens, and their government, did not know the rule of Bushido. Bushido is a code of honor in the culture of the Japanese. It bans all possible situations to dishonor one s self or the family of the same person. The person who wrote the document is Henry Dewolf Smyth. He talks about their need of plutonium and the development of theRead MoreCheating: Academic Dishonesty and Honor Code974 Words   |  4 Pagesinclude creating an honor code, forms of punishment, and possibly a computer-integrated classroom. 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