26. Liabilities arising from insolvency

This chapter considers the rules that enable insolvency practitioners to claim assets which are not held by the insolvent company itself. It discusses wrongful trading; transactions at an undervalue and preferences; transactions defrauding creditors; and invalid floating charges.

23. Value Added Tax

This chapter discusses value added tax (VAT) in the UK. VAT is charged on supplies of goods and services made in the UK. Where a person makes taxable supplies in excess of a set limit in any one-year period, he must register with Her Majesty’s Revenue and Customs (HMRC). He must then account to HMRC for VAT on all taxable supplies made. The total amount payable may be reduced by the amount of VAT paid on certain taxable supplies made to him. The liability to pay VAT to HMRC rests on suppliers of goods and services. However, the cost of the tax is actually borne by suppliers’ customers who are charged VAT on the goods and services they purchase. VAT is charged in the UK under the Value Added Tax Act (VATA) 1994.

11. Company finance

This chapter considers how companies raise money through a combination of equity and debt finance. It discusses the issuance of shares; share capital; financial assistance by a company for purchase of shares; classes of shares; finance through borrowing; secured loans; registration of charges; priority of charges; remedies of debenture-holders; receivers; position of lenders and debenture-holders; and steps to be taken by a lender to a company.

10. Shareholders

This chapter focuses on the position of shareholders in relation to a company. It considers the following issues: registration of membership; the powers of shareholders in relation to their company; the legal protection given to shareholders by the rules of equity and by the Companies Act 2006; and the payment of dividends to shareholders.

7. Limited companies—an introduction

This chapter considers the legal position of limited companies. Many businesses are run by limited companies. These range from international conglomerates to companies owned by one person running a small business. The discussions cover the concept of the company; sources of company law; registration; types of registered company; the company as a separate legal personality; and lifting the veil of incorporation.

6. The partnership agreement

This chapter focuses on provisions that may be included in a partnership agreement. It first considers whether a formal, written agreement is necessary at all. It then discusses the clauses of the partnership agreement and the issues which a prospective new partner might wish to consider before putting his signature to a partnership agreement.

2. Partnership management and finance

This chapter first discusses the legal relationship between the partners under section 24 of the Partnership Act 1890. It then explains the duty of good faith; the partnership’s finances; the distinction between a partner and a lender; division of profits and sharing of losses between partners; payment of interest; and partnership property.

1. Characteristics of partnerships

This chapter discusses the rules for determining whether a partnership has come into existence as well as the formalities with which businesses that will be run through partnerships must comply. It looks at the Partnership Act 1890. It then provides a definition of partnership. Next it considers the nature of partnership and terminology; the number of partners; the capacity to form a partnership; the duration of partnership; and partnership name and the publicity of information.

25. Company insolvency proceedings

This chapter deals with the procedures available when a company is insolvent or facing financial difficulties. It also considers the ways in which insolvent partnerships can be subject to the same procedures as companies. The law relating to these matters is principally contained in the Insolvency Act 1986 together with the Insolvency Rules 1986, as amended by the Insolvency Act 2000 and the Enterprise Act 2002. The insolvency legislation provides four procedures for companies in financial difficulties: administration, voluntary arrangement, receivership, and liquidation.

22. Capital gains tax and inheritance tax on business assets

This chapter examines the capital gains tax (CGT) and inheritance tax (IHT) regimes that apply to individuals in relation to businesses and business assets. Under the provisions of the Taxation of Chargeable Gains Act (TCGA) 1992, CGT is payable when a taxable person makes a disposal of chargeable assets giving rise to a chargeable gain unless an exemption or relief applies. The chapter first discusses the various rules which need to be considered to establish a taxpayer’s CGT liability on any given disposal. It then covers CGT in the business context; disposals of partnership property; disposals of shares; disposals of business assets owned by those involved in the business; the purchase by a company of its own shares; and inheritance tax.