Exam (elaborations)
LLB Notes Company Law: (2) Corporate Personality and Lifting the Corporate Veil
- Course
- Institution
LLB Notes Company Law: (2) Corporate Personality and Lifting the Corporate Veil
[Show more]
Seller
Follow
janetlaw09
Content preview
Company Law: (2) Corporate Personalityand Lifting the Corporate Veil
Legal Personality and Limited Liability: which Act (and section) enshrines the concept of
limited liability, confirming that the shareholders of a limited company are, generally
speaking, not liable to a liquidator in the event of the company's insolvency - ANS s.74
Insolvency Act 1986
Legal Personality and Limited Liability: A company is a legal entity that is _ from its
owners (the shareholders) as well as from its directors, creditors and employees; it has
a separate what - ANS distinct; legal personality
Legal Personality and Limited Liability: it is the dual concepts of separate legal
personality and limited liability that make companies such attractive and what - ANS
ubiquitous business models
Legal Personality and Limited Liability: what is the seminal case which established that
a company is a separate legal person - ANS Saloman v A Saloman & Co Ltd [1897]
Legal Personality and Limited Liability: Saloman v Saloman: at first instance what was
held and why - ANS that S was liable to B due to agent-principal analysis, with S being
required to indemnify the company for the losses sustained
Legal Personality and Limited Liability: Saloman v Saloman: at the Court of Appeal,
what was held and why - ANS that S was liable to B as, due to the requirements of the
legislature not being complied with (i.e 7 active members), the company was created for
an illegitimate purpose and it must therefore follow that it does not exist
Legal Personality and Limited Liability: Saloman v Saloman: House of Lords: who
delivered the leading judgment; all were in agreement that a literal interpretation of what
should be used; as such the company was validly incorporated and therefore had what -
ANS Lord Macnaghten; Companies Act 1862; a separate legal personality
Legal Personality and Limited Liability: Saloman v Saloman: House of Lords: thus, S
was not liable to who (2); the debentures were _ issued; from the moment it was
incorporated the company was at law a separate legal entity and not what - ANS the
Salomon Company or the creditors of the Salomon company; validly; the agent of the
subscribers or trustee for them
, Legal Personality and Limited Liability: Saloman v Saloman: Significance: it made it
clear that a company is a separate _ and not the agent or trustee of its controller; the
fact that some shareholders take no part in management of the company is what;
companies can therefore be validly used by individuals to carry on what is, in economic
reality, the business of an _ - ANS person; irrelevant; individual
Legal Personality and Limited Liability: Consequences of Separate Legal Personality: 1.
The company owns its own property: case where the House of Lords held that the
timber belonged to the company and not to M, therefore he was unable to claim on the
insurance policy, despite owning almost all the shares in the company. - ANS Macaura
v Northern Assurance Co [1925]
Legal Personality and Limited Liability: Consequences of Separate Legal Personality: 2.
The company enters into its own contracts: in which case did a widow, whose late
husband L was the sole firector of the company and hel 2,999/3000 shares, bring a
claim under the Workers' Compensation Act 1922. The Privy Council found that the
company and L were distinct legal entities and therefore L under his contract of
employment was a 'worker' as defined under the Act. The widow therefore was entitled
to compensation and it was irrelevant that L was also the vast majority shareholder and
sole director. - ANS Lee v Lee's Air Farming Ltd [1961]
Legal Personality and Limited Liability: Consequences of Separate Legal Personality: 3.
The company sues and is sued on its own liabilities: case where the employees of the
Texas subsidiary company NAAC became ill with asbestosis and sued for breach of
duty of care. The issue before the Court of Appeal was whether the judgment could be
enforced against the much wealthier parent company, Cape, in the English court, since
Cape's assets were all based in England. The requirement for this was either that Cape
consented to the Texas jurisdiction (which it did not) or that Cape was 'present' in the
US in Texas. Although the C's argued that Cape and its subsidiaries should be treated
as a single economic unit, and that an agency relationship existed between Cape and
NAAC, the Court of Appeal rejected all these arguments and held that the judgment
could not be enforced against Cape. - ANS Adams v Cape Industries plc [1990]
Legal Personality and Limited Liability: Current Position: which Act and sections sets out
clearly that a company becomes a body corporate (so a legal person) capable of
exercising the functions of an incorporated company from the date of incorporation;
which sections say that all company names must end with Ltd or Plc - ANS s.16
Company Act 2006; s.59, s.60 CA 2006
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 janetlaw09. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $10.49. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
76799 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now