Summary
Summary Separate legal personality and Group companies
- Course
- Institution
This is a brief summary of the cases which outline the fundamental principles and practical application of limited liability.
[Show more]
Seller
Follow
CSstudynotes2021
Reviews received
Content preview
Separate Legal personality and Group CompaniesGroups of companies are also useful for operational reasons. If a large company would like to branch
out into another field but does not want to carry the risk of liability falling onto the large company, a
subsidiary will be made to ensure the liability is only with the subsidiary companies.
Salomon v Salomon Established separate legal personality
Company is separate legal entity and thus directors
have limited liability
Macaura v Northern Insurance Substantiates that separate legal personality stems to
property ownership, all property is owned by the
company
Re Lewis’s Will Trust Cannot gift someone property that is owned by the
company
If you own shares in the company- you do not own the
actual compant
One-man company
Expressly permitted under s.7(1)CA 2006
Salomon confirmed that separate legal personality exists
There are other mechanisms for ensuring directors face consequences such as breach of
duties, WT or FT to ensure they become liable for some wrongdoings
Lifting or piercing the corporate veil
Adams v Cape
Argued that parent and subsidiary company are a single economic unit and should be jointly
liable- established that separate legal personality exists between parent and subsidiaries=
benefit of being in group company
Prest v Petrodel
Presented argument of concealment and evasion principle to escape liability
Concluded that court only seek to pierce the corporate veil to find directors liable as a remedy
of last resort. And conduct that would be of severity and beyond what previous case law has
seen= v unlikely to pierce
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller CSstudynotes2021. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $3.90. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
75057 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now