What are the advantages from a legal point of view of converting an unincorporated association to a corporation?

By incorporating a partnership, it becomes a company limited shares and certain advantages accrue there from:
• Limited Liability: members liability for debts and other obligations is limited shares. They are not liable to pay more.

• Perpetual succession: the death of a member or members of the corporation has no effect on its existence. This encourages investment.

• Owning of property: the property of a corporation does not belong to its member.The company has capacity to invest to promote its profitability.

• Suing or being sued: members are not bound to sue to remedy wrongs done to the company and cannot generally be sued for the wrongs of the company.

• Capacity to contract: the fact that a company can enter into contractual relationships means that it can engage in commercial transactions for the benefit of its members and society.

• Wide capital base: compared to other forms of business associations registered companies have the widest capital base reason of the wide spectrum of membership.

• Qualified management: companies are managed directors elected members.Members have the opportunity to elect qualified persons as managers.

• Transfer ability of shares: under the Provision of the Companies Act the shares or other interest of any member shall be movable property transferable in manner provided the articles. Company shares are transferable, thus membership keep on changing from time to time and the company could take advantage of the entrepreneurial skills of new members.

• Borrowing floating charge: a registered company is free to utilize the facility offloating charge to borrow. This is an equitable charge securing a debenture on the assets of a going concern but which remain dormant until crystallization. A floating charge:
o Enables companies with no fixed assets to borrow
o Enhances the borrowing capacity of companies with fixed assets.
o Enables companies to use future assets as security.
o Does not interfere with the ordinary business of the company.



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