Company Law Assignment. I will identify the theory of a corporate personality, demonstrate why companies exist autonomously from their promoters or owners, introduce the concept of a company having a corporate veil, and finally to identify why there is s
Module Title: Company Law Module Code: UJUTN7-30-3 Undergraduate Coursework 2010/11 Company Law Assignment – Question A In this assignment, I will identify the theory of a corporate personality, demonstrate why companies exist autonomously from their promoters or owners, introduce the concept of a company having a corporate veil, and finally to identify why there is such controversy around the notion of a court lifting the corporate veil, with a focus on ‘sham’ companies. The theory of a company having a separate legal personality comes from the introduction of incorporation. Incorporation of a company is established when the company submits all of the relevant documents to the registrar, which, if approved; will result in the issue of an incorporation certificate, acting as conclusive evidence of its incorporation. The requirement for a company to have a separate legal entity is forever scrutinized by certain legal professionals, however this is an essential factor to ensure all of the legal liability a company can create is not directly connected to its members or shareholders. As a result, companies can own property, employ people to work in a desired role, incur their own debts and initiate contracts. Incorporated companies exist independently autonomous from its original promoters and the people who are in directorship. The independent legal status
![Veil of Incorporation. Under the Companies Act 2006[1], the effect of registering a company gives it its own legal personality which becomes distinct from its members and creators.](https://mbt-essays-prod-public.s3.eu-west-1.amazonaws.com/942509/listing/942509_1.jpg)
Veil of Incorporation. Under the Companies Act 2006[1], the effect of registering a company gives it its own legal personality which becomes distinct from its members and creators.
Under the Companies Act 20061, the effect of registering a company gives it its own legal personality which becomes distinct from its members and creators. This separates the individuals within the company from legal liability; the veil of incorporation safeguards the company as a separate legal entity thus holding its own rights and responsibilities. The basis of the veil of incorporation comes from the concept of limited liability which requires the distinction between the assets of the individual shareholder and the assets of the company itself. The importance of the corporate veil is that a shareholder or owner does not acquire the debt of the company. Further to this, shareholders can only lose the amount they each invested if the company is sued and judgment is against the company. Various common law demonstrates that the veil is respected by the judiciary. However, there are situations where the individual will be held liable and the veil is lifted. Courts have lifted the veil in cases where companies have been established or used for fraudulent trading and also cases where an individual has executed wrongful or fraudulent trading. When looking at the veil of incorporation, a key case is Salomon v Salomon & Co Ltd2 which is described to be the case which best demonstrates the distinction of a company being a separate legal person from its shareholders (corporate
![Business Law Assignment. Find the case of Archbolds (Freightage) Ltd. v S. Spanglett Ltd. Randall [1961] 1 QB 374 and answer the questions set out below](https://mbt-essays-prod-public.s3.eu-west-1.amazonaws.com/1210353/listing/1210353_1.jpg)
Business Law Assignment. Find the case of Archbolds (Freightage) Ltd. v S. Spanglett Ltd. Randall [1961] 1 QB 374 and answer the questions set out below
Coursework N1 in Business Law ________________ Introduction to Business Law 2010/2011 Coursework Assignment 1 . Find the case of Archbolds (Freightage) Ltd. v S. Spanglett Ltd. Randall [1961] 1 QB 374 and answer the questions set out below. a) Which court made this decision? (1 mark) - The decision was made by the Court of Appeal. b) Name the judges who decided this case. (3 marks) - Lord Justice Pearce, Lord Justice Sellers and Lord Justice Devlin were the judges who made the decision. c) On what date was this case heard? (1 mark) - The case was heard in 1960 year, on the dates December 15, November 7, November 8, and November 4 d) What was S. Spanglett Ltd’s business? (1 mark) - S. Spanglett Ltd was manufacturer of furniture in London. e) Briefly explain the key facts relating to Archbolds (Freightage) Ltd’s claim. (3 marks) The key facts are that Archbolds (Freightage) Ltd’s were manufacturing company which owned driving license category C which does not allowed them to transport the others goods for payment. f) Why did S Spanglett Ltd say they were not liable to Archbolds (Freightage) Ltd ? (1 mark)[1] - The defendants stated that they are not liable to the plaintiff for few reasons: . There was no reason for the deduction that plaintiff knew or should know that the defendant’s van had only C license. 2. The defendants stated that they
Exclusionary principles
SRN: 229113 In Investor Compensation Scheme Ltd v West Bromwich Building Society, Lord Hoffman set out the modern approach to interpretation contract within five principles, drawing a great deal of influences from Lord Wilberforce judgment in the case of Prenn V Simmonds (1). The third principle is the exclusionary rule: �The law excludes from the admissible background the previous negotiations of the parties and their declarations of subjective intent. They are admissible only in an action for rectification. The law makes this distinction for reasons of practical policy and, in this respect only, legal interpretation differs from the way we would interpret utterances in ordinary life. The boundaries of this exception are in some respects unclear. But this is not the occasion on which to explore them.� This rule is a long standing principle in English law, which states that evidence of prior negotiations between the parties
Separated legal personality means shareholders and directors of the company are not liable for the actions of the companies. Discuss.
“The separate legal personality of a company means that shareholders of the company and directors of the company are not responsible for any liabilities that arise as a result of the actions of the company.” In 1844 incorporation was introduced with the enactment of the Joint Stock Companies Act 1844 (1844 c. 110). The doctrine of limited liability followed in 1855 under the Limited Liability Act (1855 c. 133) which was replaced by the Joint Stock Companies Act 1856 (1856 c. 47). The Act limited the liability of members to the amount they have agreed to invest in the company (Machen, 1910). Therefore, shareholders and directors of the company are not responsible for any liabilities that arise as a result of the action of the company, which gives effect to the separate legal personality doctrine. Since the case of Salomon which settled the corporate entity principle more than a hundred year ago, there has been considerable effort to sidestep this principle. Current legal decisions, however, suggest that there is a clear reluctance to depart from the separate legal personality doctrine. This essay will examine the separate legal personality principle through the Salomon case and continue by evaluate the extent to which this principle is ignored by statute and common law. Corporate legal personality principle – the Salomon principle Salomon v Salomon & Co Ltd 1897 is
Section 205 of the companies Act 1963 provides a comprehensive remedy for aggrieved shareholders. Critically discuss the above proposition.
Company Law 2: “Section 205 of the companies Act 1963 provides a comprehensive remedy for aggrieved shareholders.” Critically discuss the above proposition. Introduction: The principle of majority rule is enshrined in company law. While the law recognises that it is the right of the majority shareholder’s to conduct the company’s business in what they see as its best interests, it often happens that a majority may behave in a manner which is damaging to the interests of a minority of members. Therefore, the law has developed protection for the minority under both the common law and through statute provisions[1]. Section 205 of the Companies Act 1963 has become the primary outlet for aggrieved petitioners. It has had significant influence in reducing the total control majority shareholders and director’s initially had at their disposal, and has enabled the minority shareholders with the ability to effect change where they would have been incapable of doing so before. Nonetheless, s 205 is limited in its scope, and its application can be invariably restricted. Prior to the enactment of this provision, shareholder’ grievances within a company were governed by the general rule established in Foss v Harbottle[2], which protects companies and their separate legal identity from claims of adverse conduct. This rule ensures that only a company may institute
Critical Evaluation of The Companies Act 2006 and its comparison to The Companies Act 1985
The Companies Act 2006 aims to ensure that a company can operate with more flexibility and choice. The Companies Act 1985 was extremely regulated and facultative; 'Company law developed mainly with the public company in mind. The provisions that apply to private companies are often expressed as an exception to the provisions applying to public companies, making them difficult to understand.'1 The aim of the new act is to create clearer and less structured regulations that private companies can understand and adapt to the way in which they wish to operate. The simpler articles of association and the de-regulated approaches in which company decisions can be made in theory create a less structured and more efficient basis on which a company can function and reflect modern business requirements. The directors of a company are responsible for the general running of a company and as such they are expected to make decisions on a regular basis e.g. appointing a chairman of the board and buying or selling Company assets. Board meetings are the forum in which they make their decisions and each must be evidenced by keeping minutes of all the decisions made. Minutes are a legal requirement. Any director can keep minutes of meetings under the new act. The CA 1985 required all companies to have a company secretary but that provision has been removed. However, a company may wish to amend
The need for a truly harmonised commercial law
The need for a truly harmonised commercial law WORD COUNT 1000 . Introduction In the light of absence of world law or universal law, the need for harmonisation of law becomes a matter of importance. Because of the rapid growing of international trade as well as the advent of mixed economies, the desire to unify the substantive commercial law has been increased . However it has been alleged that harmonisation of law may turn sour. This essay will examine the benefits and drawbacks of harmonisation of law in the context of recognition to what extend harmonisation is urgent. In order to draw a fairly detailed picture of the urgency of the harmonisation law, firstly I will provide a brief overview of the nature of harmonisation of law including definition and instruments. Then I will overview the advantage and disadvantage of harmonisation of law from different points of view. After that I will proceed to evaluate whether the harmonisation of law should be internationally adopted . 2. Nature of Harmonisation 2.1. Definition It is may be difficult to define the term 'harmonisation'. In essence, the root of the word 'Harmonisation' is 'harmonise' which according to Cambridge Advanced Learner's Dictionary means "to be suitable together, or to make different people, plans, situations, etc. suitable for each other". In legal terms the harmonisation of commercial law can be
There is a very unique relationship between an 'Incorporated Company' and its Directors
There is a very unique relationship between an 'Incorporated Company' and its Directors. The law recognises that when a company goes insolvent the company itself is responsible for the debts accrued not the Company's members. However, the judiciary or the legislature1 may "lift the veil of incorporation" in circumstances such as illegality, fraud, oppression or sharp practice. The essential requirements to becoming a company are set out in s.10 (2) of the Companies Act 1985. They require a statement of particulars of the Director/s and Secretary, a registered office address for correspondence and a declaration of compliance. Once all these have been given to the Companies House, the 'Company' will receive a statement of incorporation. When a business becomes incorporated then it has its own corporate personality. Shareholders in that company become the Company's members. The directors then have fiduciary duties and statutory duties forced upon them. A Director, for the purposes of the Companies Act 1985, the Insolvency Act 1986 and the Company Directors Disqualification Act 1986, is "any person occupying the position of a Director." Directors are agents for the company. The way in which corporate personality and limited liability link together is best expressed by looking at the key cases. In the landmark case Salomon v Salomon2, Mr Salomon carried on a business as a
Commercial Law Coursework
Commercial Law Coursework Word count: 1894 (not including direct quotes) Despite being the managers of a company, directors1 have a separate legal personality from the company's they manage2. However, a director can still be liable for the actions of himself, and of the company. To this end, the director has a range of duties, and failure to comply with these can result in liability. These duties are owed to the shareholders as a whole3, though minority shareholders are also protected by the law, with Stein v Blake4 perhaps the most recent clarification. Traditionally, capital holders have been owed these duties. However, s.309 of the Companies Act 1985 extended this view, meaning directors are now obliged to regard the interest of employees. The case of Liquidator of West Mercia Safetywear v Dodd5 clarifies that a duty is owed to creditors by a director of an insolvent company6, and s214 of the Insolvency Act 1986 states that steps must be taken to minimise loss where insolvency is reasonably expected. There are a plethora of other duties owed by directors - the duty of skill and care, with Re City Equitable Fire and Insurance Co7 the leading case, with this standard illustrated perhaps most eloquently in Laguna8, with MR Lindley stating "If they (directors) act with such care as is to be reasonably expected of them...... they discharge their duty to the firm". The