Powers, Business Law and Ethics

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Powers:

The ultra vires doctrine limits a company's powers to the attainment of the company's objects under its  memorandum of association. Partnerships are not  affected by the ultra vires doctrine and partners enjoy relative freedom to diversify the firm's  operations.

(i)      Termination

A member's death, bankruptcy or insanity does not terminate the Company's legal existence whereas a  partner's death, bankruptcy or insanity terminates the partnership unless the partnership agreement provides otherwise.

(j)      Borrowing Money

A company can borrow on the security of a "floating charge". A partnership cannot borrow on a "floating  charge".

(k)     Ownership of Property

A company's property does not belong to the shareholders, either individually or collectively. Consequently, a member cannot insure the property  since he has no insurable interest therein: Macaura v Northern Assurance Co (4). A firm's property is the property of the partners who can  therefore insure it and, in the case of cash, make  drawings from it.


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