The business law Essay Example | Topics and Well Written Essays - 1750 words

The business law - Essay ExampleHowever, there are certain norms and formalities to be followed with respect to the grant of loan to consumer price index since as per law, the company and its principle shareholder are distinct entitites. Hence, in the eyes of law, the shareholder Luigi Gelata and the loaner Company, ICCI are two distinct entities. If the fount of LG performing on a personal capacity with regard to matters that effect the company, it is necessary that he seek the permission of the gameboard of Directors and seek their consent in such(prenominal) matters, especially in the case of granting, or receiving loans, or other matters which affect the company as a whole.ICCI should authorize the grant of stockholder Loan to CPI. Next, the Shareholder Loan Document has to be duly authenticated in a Board Meeting duly convened, minuted and signed by the Board of Directors of the lending Company, ICCI. Further, the Board of Directors should ratify Luigi Gelatis authority to d isburse the loan.The terms governing the granting of loan should be clearly specified in the document, including the interest rates (if any), mode, term and value of quittance or amortization scheduling and whether the loan is repayable on demand or is for a specified period.The conditionalities to be imposed in the event of neglectfulness of the loanee, that is, in the event of inability on the part of CPI to service the interest or principal amount should be clearly specified in the Shareholder Loan Document.It is advisable... judicious to have the loan document witnessed and notarized since this is an accepted practice used by Banks and Registry, should such a need arise for the loaner Company, ICCI, to utilize their services in future. (Shareholder Loan Agreements. 2008). In the second part the main facts that need to be considered are as follows Issue 1 Whether ICCI could ready priority to claim goods over bank and employees Law The unpaid seller has the highest priority to lay claim over the goods over other creditors in the event of goods organism sold and delivered to the bankrupt debtor. However, the adjacent conditions apply Debtors must have be unable to pay for the full price of the goods bought. Next, the seller has claimed return of the goods inside 30 days of delivery to the buyer, but this has not been done by the buyer. The debtor has been rendered bankrupt or a receiver has been appointed, as is evident in this case. Further, the goods are still in the same state, condition and possession of the buyer and finally, the goods are identifiable as belonging to the debtor.Application It is seen that in this case the following aspects are applicable, except whether the claim for return had been served to MMRI (unclear) Issue 2 Could the Bank claim a security interest in the goods Law Order of priorities on bankruptcy unpaid seller, PMSI secured creditor, other secured creditor, preferred creditors (including employees for up to 6 months wages ( max. $2,000), other unsecured creditors.In this case bank could lay claim of being a secured creditor after the claim of ICCI, and to the extent of balance unpaid amounts, the bank would be treated as an unsecured creditor. Application Since ICCI are 1st invidious creditors, it ranks over the secured and unsecured