The main types of alterations in a company.

At some point in the life of a company, the owners may wish to make fundamental changes to the company. Some of these changes may merely be basically administrative. such as changing the company's name. Other changes may entail alteration of the company's structure. These changes sometimes place the rights of creditors and minority shareholders at risk and are thus subject to special statutory regulation. The main examples of the types of alterations which fall into this group are constitutional amendments, mergers, consolidations, sale of substantially all assets, acquisition of controlling shares and liquidation.

The most common constitutional alterations in a company include alteration of the company's name, capital or objects. According to English law, a change of name can be made by special resolution in a general meeting, or all the members must sign a written resolution that the name of the company be changed to the new name. A signed copy of the resolution containing the new name must then be submitted to the Registrar of Companies. If the submission is in order, Companies House will issue a Certificate of Incorporation on Change of Name.

A company may alter its capital structure, provided that the articles of association grant such power. Such an alteration might entail such things as an increase in share capital, a consolidation or division of shares, a subdivision of shares or a cancellation of shares. A company may only reduce its share capital following court confirmation. A company may alter its objects clause by special resolution. However, the court may at its discretion set aside such a resolution upon application by a small group of minority shareholders.

A merger takes place when one company is absorbed into another company. Where company X is merged into company Y, company Y is the acquiring company and survives. while company X is the acquired company and disappears. In a consolidation, both company X and company Y disappear and a new company Z is formed.

A company may also gain control of another company by purchasing substantially all of the other company's assets. At common law, a sale of this kind normally required unanimous shareholder approval. However, today such sales may take place upon approval by some majority of the shareholders. Acquisition of shares is another method of gaining control of another company. This is achieved by purchasing all or the controlling portion of outstanding shares in a company. Many times this is achieved through a takeover bid, whereby company Y (the acquiring company or acquirer) makes a public invitation to shareholders of company X (the acquired company or target) to sell their stock, generally at a price above the market price. There can be hostile takeovers and friendly takeovers. In the former, the takeover is opposed by the target company's management, while in the latter the action is supported by management. Various regulations apply largely to protect the target company shareholders.

Finally, winding-up or liquidation of a company is the process by which the life of a company is brought to an end. Compulsory winding-up is ordered by the court when the company is insolvent. However, a voluntary liquidation refers to a process which may be instigated by the members of the company where the company is solvent.

Contract formation.

Under the common law, a promise becomes an enforceable contract when there is an offer by one party (offeror) that is accepted by the other party (offeree) with the exchange of legally sufficient consideration (a gift or donation does not generally count as consideration); hence the equation learned by law students: offer + acceptance + consideration = contract. The law regards a counter offer as a rejection of the offer. Therefore, a counter offer does not serve to form a contract unless, of course, the counter offer is accepted by the original offeror.

For a promise to become an enforceable contract, the parties must also agree on the essential terms of the contract, such as price and subject matter. Nevertheless, courts will enforce a vague or indefinite contract under certain circumstances, such as when the conduct of the parties, as opposed to the written instrument, manifests sufficient certainty as to the terms of the agreement.

An enforceable agreement may be manifested in either written or oral words (an express contract) or by conduct or some combination of conduct and words (an implied contract). There are exceptions to this general rule. For example, the Statute of Frauds requires that all contracts involving the sale of real property be in writing.

In a contractual dispute, certain defences to the formation of a contract may permit a party to escape his/her obligations under the contract. For example, Illegality of the subject matter, fraud in the inducement, duress and the lack of legal capacity to contract all enable a party to attack the validity of a contract.

In some cases, individuals/companies who are not a party to a particular contract may nevertheless have enforceable rights under the contract. For example, contracts made for the benefit of a third party (third-party beneficiary contracts) may be enforceable by the third party. An original party to a contract may also subsequently transfer his rights/duties under the contract to a third party by way of an assignment of rights or delegation of duties. Thisthird party is called the assignee in an assignment of rights and the delegate in a delegation of duties.