Sunday, July 4, 2010

The Ordinary career Rules of Company law

Besides the partnership and the company or corporation, there
are a number of other forms of business association, of which
some are developments or adaptations of the partnership or
company, some are based on contract between the members or on a
trust created for their benefit, and others are statutory
The first of these classes includes the cooperative society;
the building society, and home loan association; the trustee
savings bank, or people's or cooperative bank; the friendly
society, or mutual insurance association; and the American
mutual fund investment company.
The essential features of these associations are that they
provide for the small or medium investor; and, although they
originated as contractual associations, they are now governed in
most countries by special legislation and not by the law
applicable to companies or corporations.
The establishment and management of cooperatives are treated in
most countries under laws distinct from those governing other
business associations. The cooperative is a legal entity but
typically owned and controlled by those who use it or work in
it, though there may be various degrees of participation and
profit sharing.
The essential point is that the directors and managers are
accountable ultimately to the enterprise members, not to the
outside owners of capital. This form is rooted in a strong sense
of social purpose; it was devised more than a century ago as an
idealistic alternative to the conventional capitalist business
association. It has been particularly associated with credit,
retailing, agricultural marketing, and crafts.
The second class comprises the English unit trust and the
European finds - investissements or Investmentfonds, which
fulfill the same functions as American mutual funds; the
Massachusetts business trust and, finally, the cartel, or trade association, which regulates the business activities of its individual members and it itself
extensively regulated by antitrust and antimonopoly legislation.
The third class of associations, those wholly created by
statute, comprises corporations formed to cany on nationalized
business undertakings or to coexist with other businesses in
the same field or to fulfill a particular governmental function
though they may raise loans from the public. They are regarded
in European law as being creatures of public law, like
departments and agencies of the government.
In recent years, however, a hybrid between the state
corporation and the privately owned corporation or company has
appeared in the form of the mixed company or corporation. In
this kind of organization, part of the association's share
capital is held by the state or a state agency and part by
private persons, this situation often resulting from a partial
acquisition of the association's shares by the state. In only
France and Italy are there special rules governing such
associations; in the United Kingdom and Germany they are subject
to the ordinary rules of company law.
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