l12 quick revision

professional companies

• regulated by law 2/2007

• exist for the joint excercise of regulated professions such as law medicine and architecture

• joint= services are provided through the company not directly by the individual professional

  • the company deals with clients and holds the rights and obligations arising from the service

• the company must have an exclusive professional purpose and cannot pursue unrelated actvities

• it may take forms such as an pblic liability company and a private limited company

• professional partner must control the company=

  • in capital companies they must hold the majority of capital and voting rights

  • managament must also remain under professional control

• the status of professional partner is protected because trasnfer requires consent

• professional partners enjoy broad rights of withdrawal

• exclusion is possible for serious breaches or loss of the required professional qualification

• professionalcompanies ensure that regulated professions remain controlled by qualified professionals while benefitting from the advantage of corpate organisation

cooperatives (mutualist based spcieties)

• a cop is amutualist company formed by persons who joint together to satisfy the economic and social needs of the members through democratic management

  • examples= worker, housing, consumer, credit

• its main principles are open membership, non capitalist organisation and democratic control

• unlike capitalist comp benefits are distributed according to participation in the co op rather than the amount of capital invested

• the key rule is one member one vote

• members have rights such as voting information and withdrawal

• members have duties including capital contributions, active collaboration and confidentiality

• liability is generally limited to subscribed contributions

• coops are governed by the general assembly and the governing council

• they iperate with variable capital because members may freely join and freely leave differing from capitalised fixed capital only changeable by the bylaws

• overall they priotise cooperation and mutual benefit rather than maximising profits for investors

mutual insurance companies mutual benefit societies and reciprical guarantee companies

• mutual insurance comapnies are non profit making commercial companies whose purpose is to cover members against insured risk

  • members are both consumers and owners

  • they pay fixed premiums and the funds are used to compensate members who suffer losses through risk

  • these companies may only negage in insurance activities

    • ie a group of doctors forming a company to protect against medical negligence

    • all pay fixed premiums which are used if a doctor is sued

• mutual benefit societies provide volunatary welfare protection that complements the already compulsory social security from the state

  • they offer benefits such as pensions sickness cover and death benefits

  • pay a fixed or viariable premium and the funds are used to to provide the additional benefits to members

    • lawyers contributing to a mutual society that provides an additional retirement pension

• recipical guarantee companies help small and medium sized enterprises obtain financing

  • they do not lend money directly instead they guarantee the smes loan of credit

  • this makes banks more willing to provide credit and often on better terms ie lower interest

  • members are not personally liable for the company debts

• all 3 strctures are based on mutual assistance rather than profit maximisation

economic interest groupings

• an organisation whose purpose is to facilitate the activities of its members and improve their results in the commercial field

• unlike ordinary companies it does not exist to makimise profit for itself; instead it aims at maximising its members profits

• it supports its members through activities such as shared services joint purchasing research and marketing

• it has legal personality and commercial status but profits and losses belong directly to the members as determined by the deed

  • disitrubuted equally if deed is silent

• the grou must remain ancillary to the members activities

  • it cannot replace their businesses

  • it cannot control members

  • it cannot own shares in member companies as this would allow them to directly benefit

• it is a cooperative support mechanism that helps members work more effciently while remaining indepdnant

group of companies

• consists of legally seperate companes operating under common economic management

• the parent company or holding company controls one or more subsidary companies

  • it aquires shares in order to excercise control not to merely invest in the business for a profit

• subsidaries remain seperate legal entities but follow the strategy determined by the parent company

  • company B owns a hotel business legally but company A decides how it is managed

• control is presumed when another company holds

  • the majority of voting rights in the gm

    • owns 60%

  • has the power to appoint most directors

  • effectively uses its votes to appoint the majority of the board

    • a own 45% but because remaining shares are widely disperses he consistenly elects most of tthe board

• control may be direct (parent on sub) or indirect through chains of companies (parent on sub on subsub)

• functions as a single economic unit despite the seperate legal personalities of its members