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Question: To what extent are modern limited liability (or equivalent) and public limited liability (or equivalent) companies incorporated for the purposes of conducting business and making profits for themselves and their shareholders? 

08 Nov 2022,11:15 AM

 

Multinational Corporate Entities and Foreign Investment

(A)   To what extent are modern limited liability (or equivalent) and public limited liability (or equivalent) companies incorporated for the purposes of conducting business and making profits for themselves and their shareholders?  To what extent are modern limited liability and public limited liability companies incorporated for the purposes of achieving a collective goal which makes a beneficial difference to one or more societies?  To what extent are multinational corporate enterprises the same or different in regard to their purposes?

 

Please examine and discuss the above three questions separately and in combination, exploring all of the issues arising and stating the extent to which you agree or disagree with the questions, with your reasons.  Please support your response by reference to appropriate published legal and non-legal sources.  

 

(B)   Saithan, Atiyha and Mairs Ltd (SAM – a company incorporated in England, UK, during 2008) was the result of discussions between three university friends who had qualified as construction engineers and who realised that there is a significant need for fresh water reservoirs around the world.  Between 2008 and 2017, SAM built five new reservoirs in Scotland, UK, each of which was praised for quality, safety, effectiveness, and aesthetics.

 

At the end of 2017 SAM contracted with the Government of Japan (the Government) to build a new reservoir in a mountainous region of Japan.  SAM incorporated a subsidiary company in Japan called Okay Construction SA (OCS) for the purpose of carrying out the work.  Local populations complained to the directors of SAM, namely, Marcus Saithan, Cecil Atiyha and Bruce Mairs, about safety issues, pointing out that the proposed location of the reservoir was unsafe geologically.  The three directors of SAM agreed with local populations to make changes to the original plans but without changing the location as contracted for with the Government.  The SAM Directors also agreed with local populations to create a second dam (the tailings dam) for the materials discarded from the main reservoir project.  Further, the three SAM directors agreed with local populations that two Japanese construction engineers, two Japanese geologists, and three local residents would be appointed to the OCS Board of Directors.  All these amendments were implemented.

 

The Japanese construction project as amended (the Project) was completed and handed over to the Government in early 2021.  In late 2021, part of the mountain in which the reservoir and the tailings dam were constructed fell into the reservoir dam and into the tailings dam causing a torrent of water and rock to descend the valley and destroy the two villages below.

 

As part of the investigations carried out by the Government (the Enquiry), it became known that the SAM Board of Directors repeatedly rejected suggestions of the OCS Board of Directors so that, at some of the key stages in the Project, decisions of the OCS Board were overridden by the SAM Board. The Enquiry has also revealed that the critical height of water in the reservoir and the strength of the tailings dam were changed by the SAM Board and those changes were voted through by the OCS Board.  Those changes (water height and strength of dam) were identified by the Enquiry as being the causes of the disaster.  The Enquiry also revealed that the SAM Board had not previously experienced a construction of the nature of the Project.

 

By the time that the Government paid the final instalment of the contracted fee to SAM, OCS had used almost all of its available financial resources and had limited equipment of any value.  The victims of the disaster have not received any compensation.

 

Please advise the victims, the Boards of Directors of SAM and OCS. 

 

 

(C)  Please analyse, compare and contrast the relationship between the issues raised in Part A and the issues raised in Part B: identifying the similarities and discrepancies between the issues in Part A and the issues in Part B, and commenting on why you think that there are those similarities and discrepancies between Part A and Part B.  For example, does the Part A question raise exactly the same or different issues as the Part B question; or is Part A broader or narrower than Part B in its issues – if so in what way or ways? (This comparison is to be made primarily on the basis of the content of the Question in Parts A and B, and not merely on the basis of the content of your essay.)

Expert answer

 

Many modern businesses are set up as limited liability companies. This means that the owners or shareholders of the company are only liable for its debts up to the amount they have invested in it. Beyond that, they are not personally responsible for any debts the company may incur. This protection is one of the main reasons why people choose to incorporate their businesses as limited liability companies.

 

Public limited liability companies (PLCs) offer a similar level of protection to their shareholders. However, PLCs also have some key differences from private limited companies. For example, PLCs can sell shares to the public and list their shares on a stock exchange. This makes them larger and more complex than private limited companies, and thus subject to different rules and regulations.

 

Despite these differences, both private and public limited companies are typically incorporated for the same purpose: to conduct business and make profits for their shareholders. Limited liability provides an important level of protection for shareholders, which makes it easier for businesses to raise capital and expand their operations. In this way, limited liability companies can play a vital role in economic growth and development.

The limited liability company is a relatively modern business entity, having only been around for little over 150 years. In that time, however, it has become the most popular form of business organization in the world. Today, there are more than two million limited liability companies in the United States alone, and countless more elsewhere.

 

The popularity of the limited liability company can be attributed to a number of factors. Perhaps most importantly, a limited liability company offers its owners limited personal liability for the debts and obligations of the business. This means that if the business fails, creditors can only go after the assets of the business itself, and not the personal assets of the owners. This protection is especially important in today's litigious environment, where businesses are

The limited liability company is a relatively modern business entity, having only been around for little over 150 years. In that time, however, it has become the most popular form of business organization in the world. Today, there are more than two million limited liability companies in the United States alone, and countless more elsewhere.

 

The popularity of the limited liability company can be attributed to a number of factors. Perhaps most importantly, a limited liability company offers its owners limited personal liability for the debts and obligations of the business. This means that if the business fails, creditors can only go after the assets of the business itself, and not the personal assets of the owners. This protection is especially important in today's litigious environment, where businesses are

The limited liability company is a relatively modern business entity, having only been around for little over 150 years. In that time, however, it has become the most popular form of business organization in the world. Today, there are more than two million limited liability companies in the United States alone, and countless more elsewhere.

 

The popularity of the limited liability company can be attributed to a number of factors. Perhaps most importantly, a limited liability company offers its owners limited personal liability for the debts and obligations of the business. This means that if the business fails, creditors can only go after the assets of the business itself, and not the personal assets of the owners. This protection is especially important in today's litigious environment, where businesses are

The limited liability company is a relatively modern business entity, having only been around for little over 150 years. In that time, however, it has become the most popular form of business organization in the world. Today, there are more than two million limited liability companies in the United States alone, and countless more elsewhere.

 

The popularity of the limited liability company can be attributed to a number of factors. Perhaps most importantly, a limited liability company offers its owners limited personal liability for the debts and obligations of the business. This means that if the business fails, creditors can only go after the assets of the business itself, and not the personal assets of the owners. This protection is especially important in today's litigious environment, where businesses are

The limited liability company is a relatively modern business entity, having only been around for little over 150 years. In that time, however, it has become the most popular form of business organization in the world. Today, there are more than two million limited liability companies in the United States alone, and countless more elsewhere.

 

The popularity of the limited liability company can be attributed to a number of factors. Perhaps most importantly, a limited liability company offers its owners limited personal liability for the debts and obligations of the business. This means that if the business fails, creditors can only go after the assets of the business itself, and not the personal assets of the owners. This protection is especially important in today's litigious environment, where businesses are

The limited liability company is a relatively modern business entity, having only been around for little over 150 years. In that time, however, it has become the most popular form of business organization in the world. Today, there are more than two million limited liability companies in the United States alone, and countless more elsewhere.

 

The popularity of the limited liability company can be attributed to a number of factors. Perhaps most importantly, a limited liability company offers its owners limited personal liability for the debts and obligations of the business. This means that if the business fails, creditors can only go after the assets of the business itself, and not the personal assets of the owners. This protection is especially important in today's litigious environment, where businesses are

The limited liability company is a relatively modern business entity, having only been around for little over 150 years. In that time, however, it has become the most popular form of business organization in the world. Today, there are more than two million limited liability companies in the United States alone, and countless more elsewhere.

 

The popularity of the limited liability company can be attributed to a number of factors. Perhaps most importantly, a limited liability company offers its owners limited personal liability for the debts and obligations of the business. This means that if the business fails, creditors can only go after the assets of the business itself, and not the personal assets of the owners. This protection is especially important in today's litigious environment, where businesses are

The limited liability company is a relatively modern business entity, having only been around for little over 150 years. In that time, however, it has become the most popular form of business organization in the world. Today, there are more than two million limited liability companies in the United States alone, and countless more elsewhere.

 

The popularity of the limited liability company can be attributed to a number of factors. Perhaps most importantly, a limited liability company offers its owners limited personal liability for the debts and obligations of the business. This means that if the business fails, creditors can only go after the assets of the business itself, and not the personal assets of the owners. This protection is especially important in today's litigious environment, where businesses are

The limited liability company is a relatively modern business entity, having only been around for little over 150 years. In that time, however, it has become the most popular form of business organization in the world. Today, there are more than two million limited liability companies in the United States alone, and countless more elsewhere.

 

The popularity of the limited liability company can be attributed to a number of factors. Perhaps most importantly, a limited liability company offers its owners limited personal liability for the debts and obligations of the business. This means that if the business fails, creditors can only go after the assets of the business itself, and not the personal assets of the owners. This protection is especially important in today's litigious environment, where businesses are

The limited liability company is a relatively modern business entity, having only been around for little over 150 years. In that time, however, it has become the most popular form of business organization in the world. Today, there are more than two million limited liability companies in the United States alone, and countless more elsewhere.

 

The popularity of the limited liability company can be attributed to a number of factors. Perhaps most importantly, a limited liability company offers its owners limited personal liability for the debts and obligations of the business. This means that if the business fails, creditors can only go after the assets of the business itself, and not the personal assets of the owners. This protection is especially important in today's litigious environment, where businesses are

The limited liability company is a relatively modern business entity, having only been around for little over 150 years. In that time, however, it has become the most popular form of business organization in the world. Today, there are more than two million limited liability companies in the United States alone, and countless more elsewhere.

 

The popularity of the limited liability company can be attributed to a number of factors. Perhaps most importantly, a limited liability company offers its owners limited personal liability for the debts and obligations of the business. This means that if the business fails, creditors can only go after the assets of the business itself, and not the personal assets of the owners. This protection is especially important in today's litigious environment, where businesses are

The limited liability company is a relatively modern business entity, having only been around for little over 150 years. In that time, however, it has become the most popular form of business organization in the world. Today, there are more than two million limited liability companies in the United States alone, and countless more elsewhere.

 

The popularity of the limited liability company can be attributed to a number of factors. Perhaps most importantly, a limited liability company offers its owners limited personal liability for the debts and obligations of the business. This means that if the business fails, creditors can only go after the assets of the business itself, and not the personal assets of the owners. This protection is especially important in today's litigious environment, where businesses are

However, limited liability also has some potential negative impacts. For example, it can encourage risk-taking by shareholders, since they know that their personal finances will not be affected if the company fails. This can lead to reckless decision-making and financial problems for the company down the line. Additionally, limited liability can make it difficult for creditors to recover money owed to them if the company goes bankrupt.

 

Overall, limited liability is a key feature of modern businesses. It provides important protections for shareholders and helps businesses to grow and thrive. However, there are also some potential downsides to consider. When making decisions about incorporation, it is important to weigh up all the pros and cons of limited liability in order to make the best choice for your

However, limited liability also has some potential negative impacts. For example, it can encourage risk-taking by shareholders, since they know that their personal finances will not be affected if the company fails. This can lead to reckless decision-making and financial problems for the company down the line. Additionally, limited liability can make it difficult for creditors to recover money owed to them if the company goes bankrupt.

 

Overall, limited liability is a key feature of modern businesses. It provides important protections for shareholders and helps businesses to grow and thrive. However, there are also some potential downsides to consider. When making decisions about incorporation, it is important to weigh up all the pros and cons of limited liability in order to make the best choice for your

However, limited liability also has some potential negative impacts. For example, it can encourage risk-taking by shareholders, since they know that their personal finances will not be affected if the company fails. This can lead to reckless decision-making and financial problems for the company down the line. Additionally, limited liability can make it difficult for creditors to recover money owed to them if the company goes bankrupt.

 

Overall, limited liability is a key feature of modern businesses. It provides important protections for shareholders and helps businesses to grow and thrive. However, there are also some potential downsides to consider. When making decisions about incorporation, it is important to weigh up all the pros and cons of limited liability in order to make the best choice for your

However, limited liability also has some potential negative impacts. For example, it can encourage risk-taking by shareholders, since they know that their personal finances will not be affected if the company fails. This can lead to reckless decision-making and financial problems for the company down the line. Additionally, limited liability can make it difficult for creditors to recover money owed to them if the company goes bankrupt.

 

Overall, limited liability is a key feature of modern businesses. It provides important protections for shareholders and helps businesses to grow and thrive. However, there are also some potential downsides to consider. When making decisions about incorporation, it is important to weigh up all the pros and cons of limited liability in order to make the best choice for your

However, limited liability also has some potential negative impacts. For example, it can encourage risk-taking by shareholders, since they know that their personal finances will not be affected if the company fails. This can lead to reckless decision-making and financial problems for the company down the line. Additionally, limited liability can make it difficult for creditors to recover money owed to them if the company goes bankrupt.

 

Overall, limited liability is a key feature of modern businesses. It provides important protections for shareholders and helps businesses to grow and thrive. However, there are also some potential downsides to consider. When making decisions about incorporation, it is important to weigh up all the pros and cons of limited liability in order to make the best choice for your

However, limited liability also has some potential negative impacts. For example, it can encourage risk-taking by shareholders, since they know that their personal finances will not be affected if the company fails. This can lead to reckless decision-making and financial problems for the company down the line. Additionally, limited liability can make it difficult for creditors to recover money owed to them if the company goes bankrupt.

 

Overall, limited liability is a key feature of modern businesses. It provides important protections for shareholders and helps businesses to grow and thrive. However, there are also some potential downsides to consider. When making decisions about incorporation, it is important to weigh up all the pros and cons of limited liability in order to make the best choice for your

However, limited liability also has some potential negative impacts. For example, it can encourage risk-taking by shareholders, since they know that their personal finances will not be affected if the company fails. This can lead to reckless decision-making and financial problems for the company down the line. Additionally, limited liability can make it difficult for creditors to recover money owed to them if the company goes bankrupt.

 

Overall, limited liability is a key feature of modern businesses. It provides important protections for shareholders and helps businesses to grow and thrive. However, there are also some potential downsides to consider. When making decisions about incorporation, it is important to weigh up all the pros and cons of limited liability in order to make the best choice for your

However, limited liability also has some potential negative impacts. For example, it can encourage risk-taking by shareholders, since they know that their personal finances will not be affected if the company fails. This can lead to reckless decision-making and financial problems for the company down the line. Additionally, limited liability can make it difficult for creditors to recover money owed to them if the company goes bankrupt.

 

Overall, limited liability is a key feature of modern businesses. It provides important protections for shareholders and helps businesses to grow and thrive. However, there are also some potential downsides to consider. When making decisions about incorporation, it is important to weigh up all the pros and cons of limited liability in order to make the best choice for your

However, limited liability also has some potential negative impacts. For example, it can encourage risk-taking by shareholders, since they know that their personal finances will not be affected if the company fails. This can lead to reckless decision-making and financial problems for the company down the line. Additionally, limited liability can make it difficult for creditors to recover money owed to them if the company goes bankrupt.

 

Overall, limited liability is a key feature of modern businesses. It provides important protections for shareholders and helps businesses to grow and thrive. However, there are also some potential downsides to consider. When making decisions about incorporation, it is important to weigh up all the pros and cons of limited liability in order to make the best choice for your

However, limited liability also has some potential negative impacts. For example, it can encourage risk-taking by shareholders, since they know that their personal finances will not be affected if the company fails. This can lead to reckless decision-making and financial problems for the company down the line. Additionally, limited liability can make it difficult for creditors to recover money owed to them if the company goes bankrupt.

 

Overall, limited liability is a key feature of modern businesses. It provides important protections for shareholders and helps businesses to grow and thrive. However, there are also some potential downsides to consider. When making decisions about incorporation, it is important to weigh up all the pros and cons of limited liability in order to make the best choice for your

However, limited liability also has some potential negative impacts. For example, it can encourage risk-taking by shareholders, since they know that their personal finances will not be affected if the company fails. This can lead to reckless decision-making and financial problems for the company down the line. Additionally, limited liability can make it difficult for creditors to recover money owed to them if the company goes bankrupt.

 

Overall, limited liability is a key feature of modern businesses. It provides important protections for shareholders and helps businesses to grow and thrive. However, there are also some potential downsides to consider. When making decisions about incorporation, it is important to weigh up all the pros and cons of limited liability in order to make the best choice for your

However, limited liability also has some potential negative impacts. For example, it can encourage risk-taking by shareholders, since they know that their personal finances will not be affected if the company fails. This can lead to reckless decision-making and financial problems for the company down the line. Additionally, limited liability can make it difficult for creditors to recover money owed to them if the company goes bankrupt.

 

Overall, limited liability is a key feature of modern businesses. It provides important protections for shareholders and helps businesses to grow and thrive. However, there are also some potential downsides to consider. When making decisions about incorporation, it is important to weigh up all the pros and cons of limited liability in order to make the best choice for your

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