An anticipated proxy fight in order to perpetuate their

Control of the company.

3 It might be used to define the board's duty to act and,

Depending upon the severity of the potential breach of

Such duty, the court might step in and overturn the

board's decision.

State 2 requires 3 precludes

25 1 The purpose of the letter is to provide the lawyer's

Client with an understanding of the legal aspects of the

Case in which the client is involved.

2 It was probably written at the shareholders' request so

That they could make an informed decision about how

To proceed regarding the matter.

3 Paragraph 1: Referring to the subject matter

Paragraph 2: Summarising facts

Paragraph 3: Summarising facts; Identifying legal issue

Paragraph 4: Referring to relevant legislation/

Regulations; (Referring to previous court decisions)

Paragraph 5: Summarising facts; Referring to previous

Court decisions; Drawing conclusions

I have now had an opportunity to research the law on

This point and I can provide you with the following

Advice.

To summa rise the facts of the case, ...

The issue in this case is whether the ...

The bylaws of the company state that ...

The law in this jurisdiction requires ...

True

In lieu thereof

Vested in

Provided

The statutes give wide leeway...

It is possible that the court will take this into

Consideration and hold that...

The court might then hold that...

Courts are usually reluctant to ...

The facts in this case simply do not justify ...

I therefore conclude that...

Suggested answer

Dear Mr Carpenter

You have requested advice concerning the founding of a

Limited Liability Partnership (LLP) and whether this form of

Company would be advantageous for your accounting firm.

I have now had an opportunity to research the matter and

Can provide you with the following advice.

First, allow me to outline the features and some

Advantages of an LLP. In an LLP, obligations accrue to the

Name of the partnership rather than to the joint names of

Its individual members. Similar to a shareholder in a

Limited liability company, an individual partner is only

Personally liable for his pre-determined contributions to

Partnership funds. Unlike a limited liability company,

However, the LLP is more flexible in terms of decisionmaking.

Furthermore, board meetings, minutes books and

Annual or extraordinary general meetings are not required.

In addition, the LLP enjoys the tax status of a partnership

And the limited liability of its members.

However, an LLP also has some significant disadvantages.

The accounting requirements are very demanding and are

Expensive to comply with for small and medium-sized

LLPs, as accounts must be professionally audited. It

Should also be mentioned that there is a restriction on

The management freedom of an LLP. Each LLP must

Appoint a member who is responsible for administrative

Obligations. This member may incur criminal liability in

Certain circumstances. Moreover, an LLP member enjoys

Less limited liability toward third parties for negligent acts

Or omissions in the course of his duties than a company

Date: 2015-12-11; view: 813