Company Law Topic Notes

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Questions and Answers

What does the principle of separate legal personality indicate about a company?

A company acquires a distinct personality that is separate from its owners. (correct)

A company cannot own property independently of its managers.

A company has contractual limitations consistent with its owners.

A company’s identity depends entirely on its shareholders.

What does the veil of incorporation protect shareholders from?

Having perpetual existence as a company.

Owning property independently.

Being able to enter into contracts.

Being held liable for the company's debts. (correct)

Under what circumstance can the veil of incorporation be pierced?

When there is only one shareholder involved.

Whenever a company is profitable.

When shareholders properly inform others of their business transactions.

When it is used to evade legal liabilities or limitations. (correct)

According to the content, what is a key consequence of a company's perpetual existence?

The company's existence is not affected by changes in ownership. Signup and view all the answers

What did Lord Denning argue regarding groups of companies?

A corporate group can be viewed as a single economic unit in law. Signup and view all the answers

In which case was the notion of lifting the veil discussed in relation to evasion of liability?

Gilford Motor Co v Horn Signup and view all the answers

The agency argument can be used in limited cases to challenge which principle?

The principle of separate corporate personality. Signup and view all the answers

What is a key aspect of a company's contractual capacity as mentioned in the content?

A company can enter contracts independently of its members. Signup and view all the answers

What case established the principle of separate corporate personality?

Salmon v Salomon Signup and view all the answers

Which of the following best describes the concept of separate corporate personality?

A company operates independently of its shareholders and directors. Signup and view all the answers

Which term best describes the legal distinction that allows a company to act on its own behalf?

Corporate personality Signup and view all the answers

What implication arises from the principle of separate legal personality?

Companies can sue and be sued in their own name. Signup and view all the answers

In which type of case would the principle of separate corporate personality be most relevant?

Litigation involving contracts held by the company Signup and view all the answers

What major change in understanding does the separate corporate personality provoke in terms of liability?

Liability is limited to the company's assets. Signup and view all the answers

Which case is NOT related to the concept of separate corporate personality?

Dimo Holdings v Jaeger Development Signup and view all the answers

What does the separate corporate personality principle protect shareholders from?

Liability for corporate debts beyond their investment Signup and view all the answers

What is a principal decision established in Salmon v Salmon?

Separate corporate personality is a clear and principal decision. Signup and view all the answers

Under what circumstances can the corporate veil be pierced according to the established principles?

To prevent the abuse of corporate legal personality. Signup and view all the answers

What does the principle of nomineeship refer to in corporate law?

A spouse can claim assets of the other through a corporate entity. Signup and view all the answers

In Adams v Cape Industries, what was reaffirmed regarding corporate personality?

Liabilities incurred by a company are the responsibility of the company itself. Signup and view all the answers

What aspect did Lord Nueberger highlight in Prest regarding the court's analysis?

The examination of specific facts is necessary. Signup and view all the answers

In the case of Akhmedova v Ackmedova, what was the wife’s contention regarding corporate assets?

The company was merely a vehicle for her husband’s interests. Signup and view all the answers

What was the main legal issue in Urban Development Corp v Jacitiar?

Whether adverse possession can apply to a company. Signup and view all the answers

What does the corporate veil generally protect according to the principles discussed?

The separate legal identity of the corporation. Signup and view all the answers

Study Notes

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Company law Topic and Lecture notes: 1
Topic 1 - Separate Legal Entity- Principle of Corporate Personality: 7
- Summary: 7
- Adams v Cape Industries Plc: 8
- VTB Capital v Nutriteck: 9
- 1A. Introduction: 9
- Salomon v Salomon: 10
- B. The vail of incorporation: 11
  - 1.B.i Consequences of the veil of incorporation: 12
    - 1. The company has perpetual existence/succession – a life of its own: 12
    - 1. The company has a contractual capacity: 13
    - 1. The Doctrine of Sperate ownership of property: 14
  - C. Piecing the Corporate Vail: 14
    - Gilford Moto Company v Horne and Another: 15
    - Commentary: 15
    - Jones v. Lipman [1962] 1 WLR 832: 16
    - Commentary: 16
    - Donovan Crawford v Financial Institutions Services Ltd [2003] UKPC 13: 16
    - NOTE- Agency: 17
- Smith Stone & Knight Ltd v. Birmingham Corporation [1939] 4 ALL ER 116: 17
- Topic 3 - Director's duties: 32
  - Summary: 33
  - Who and what is a director: 34
  - 3.1 Introduction: 34
  - 3.2 Definition of Director: 35
  - Who is a director?: 35
  - 3.3 De facto, De jure directors and Shadow Directors: 35
    - A. De facto Directors: 36
    - Re Hydro-dam 1994: 36
    - B. Shadow Directors: 37
    - Secretary of State for Trade and Industry v Devrell 2001: 38
- 3.4 The board of directors and the duties imposed: 39
  - Section 60 – The Management Mandate: 40
  - Commentary: 40
  - Statutory fiduciary and non-fiduciary duty: 40
  - Section 99 – Director's Duties: 41
  - Commentary on section 99: 42
  - Unanimous shareholder agreement: 43
  - Section 137(2): 43
  - 3.4. A- The non-fiduciary duties of the directors under 99(1)(b): 43

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Explore key principles of company law, including the separate legal entity doctrine and landmark cases such as Salomon v Salomon. This quiz covers essential concepts related to corporate personality and the implications of incorporation. Test your knowledge and understanding of these foundational legal principles.