Company Law coursewrok 2009-10 Essay Example | Topics and Well Written Essays - 3000 words

Company Law coursewrok 2009-10 - Essay ExampleThe constitution of the company, i.e. its memorandum and articles of association, govern the way in which these relationships operate and has been referred to as a contract between the genus Phalluss, i.e. the shareholders and the company itself. In this paper, concerns that had previously been raised in relation to section 14 of the Companies Act 1985 are discussed and analyseed in the context of the new arrangements brought in by section 33 of the Companies Act 2006. In order to discuss these issues, the position under section 14 will first be considered along with relevant case law, before moving on to consider section 33 and the way in which this changes the contractual relationships between the relevant entities.Closed companies present crabby difficulties in this regard, due to the fact that control of the company is held either by five or few people or where all shareholders are also directors. Although it is recognised that a director is different in terms of entity to a shareholder when the same people undertake both roles, it is simply not interoperable to deal with the contractual relationship between the company, the members and the directors. Through away this paper, the focus is on the difficulties, both historically and currently, in relation to the contract between the shareholders and the company where the company is a closed company of the nature set forth above.As noted by Professor Rajak1, The s.14 Companies Act 1985 contract between the company and the shareholders gives rise to shared rights and obligations, but these lie in favour of and against the shareholder in his capacity as a member of the company. This suggests that, although the concept underlying section 14 is relatively clear, it is not always going to be practically obvious and this has been evident in the way that the court has handled issues of the contractual relationship laid out by the constitution, particularly in relat ion to closed companies.In accordance with