• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Corporate Separate Personality

Extracts from this document...

Introduction

Critically assess the effects of Corporate Separate Personality A company is one which can vary in size and in what kind of speciality and products they offer but they all have a few common factors amongst one another. All companies must comply with effects of registration by following the statutes in the companies Act 2006 s 16. A sector of this statute1 states that when a company consists of shares the members who have subscribed to the memorandum of association can then become the holders of the shares they had subscribed. The two similarities I am going to look at are; limited liability and separate legal personality. The latter refers to the liability of the members of a company is limited by the number of shares they hold. If the company faces a point during their incorporation where they have insufficient funds the company's creditors cannot seek the amount from members. Separate legal personality is when a company is a separate legal person, distinct from its members and directors.2 The foundations of company law was established in Saloman v Saloman & Co. ...read more.

Middle

4 There are many advantages and disadvantages associated with corporate separate personality. One advantage of separate personality is that it could encourage investors to invest in a situation where they may not have before. A disadvantage could be the loss the creditors make or the shareholders would not with good faith towards the creditors money and carry out unwise investments with the creditors money. In company law the term 'lifting the corporate veil' is when you are looking behind the company's separate personality to make the members of the company liable. This would be an exception to the genera rule that shields the members from liability. They are held liable regardless of the fact that directors are immune from liability that the company faces. This is seen as a major constraint for members as they are only liable to the company according to the guarantee of their shares. Although Salomans case creates the back bone for corporate separate liability exceptions are looked into to discover the 'reality' of the situations which are being disputed. ...read more.

Conclusion

This statute looks at why a reasonable director of a company would not be able to see whether the company is a going concern before winding up of the company takes place. An example to show where a company is guilty of these statutes is displayed in Gilford Motors Ltd v Horne8and in Jones v Lipman9. Lifting the veil of incorporation is an aspect of company law which has many different decisions a court can lead to. The court try to stay consistent with the Saloman case but may be obliged to lift the veil of incorporation if justice needs to be served. Corporate separate personality is something which provides an immense advantage to its members as the company has legal existence which means it is responsible for its own debts. The company and its members are seen as separate legal entities which restricts the liability they owe to the company to the shares they subscribed in the memorandum of association. I conclude that the overall effect of corporate separate liability is positive and has a great impact in Company Law. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our AS and A Level Machinery of Justice section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Here's what a teacher thought of this essay

3 star(s)

Summary:
This is a generally accurate assessment of corporate personality. There could be more accurate expressions used at times and some of the points made could be developed further.
Rating: XXX

Marked by teacher Nick Price 04/10/2013

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related AS and A Level Machinery of Justice essays

  1. Marked by a teacher

    Describing the Rules and Aids to Statute interpretation. Including Advantages and Disadvantages.

    4 star(s)

    Also as of the Pepper v Hart case of 1993, the general prohibition that a court cannot refer to Parliamentary materials such as Hansards- a record book of everything said in the Parliamentary Houses was relaxed. Thus meaning that judges can refer to these if: Legislation is ambiguous or obscure

  2. Critically analyse the relationship between law and justice.

    Therefore, a law could be just, even if it created social inequalities. Furthermore, the American jurist John Rawls published his "Theory of Justice" in 1971. He defined justice as that which prevailed in a just society, and a just society as one to which a group of rational but mutually

  1. International Institutions and Human Rights. The three international institutions and their impact on ...

    The Fourth Geneva Convention was signed in 1949. This convention reaffirmed the requirements of the first three conventions and provided protections for civilians during wartime. It was largely inspired initially by the written work of Henri Dunant, and his humanitarian efforts during the Battle of Solferino in Italy.

  2. Alternative Dispute Resolution Essay

    ACAS will then contact parties and attempt to resolve the dispute without direct contact, in a hearing etc. This suggests that employees are under direct pressure to settle however which is not a good thing. Arbitration Arbitration is the voluntary submission by the parties of their dispute to some other person who isn't a judge.

  1. Free essay

    Critically discuss whether the criminal courts of England and Wales require substantial reform. Firstly ...

    The information on the web service should be accessible on monitor screens in the public parts of the court building and in the jury assembly area, and also on the website of the Crown Court. Text messages can also be sent to people who need to be warned when to attend court.

  2. Free essay

    Law and Justice

    This may seem odd, as 'Access to Justice' seems to imply that there will be more a stance towards one side than the other, as this may be the only way justice can be reached. Lord Justice Darling once stated that 'the law courts of England are open to all men like the doors of the Ritz hotel'.

  1. Demonstrate your understanding of both the UK civil and criminal court systems and their ...

    Once it is determined that a criminal law has been broken, the state will then proceed to impose a sentence against the defendant such as imprisonment, probation, or a fine payable to the state. All criminal offenses are either indictable, summary or 'triable either way' offences.

  2. Explain the role of the CCRC (Criminal Cases Review Commission)

    The CCRC will look at the new evidence but will only refer cases if there is a 'real possibility' that the appeal courts would change the original decision. The Court of Appeal will only quash a conviction if it is decided that it is UNSAFE.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work