18 Questions
What must the court require a company to settle if reduction involves one of the first two methods?
A list of creditors entitled to object
What action must a public company take if its share capital falls below £50,000?
Re-register as a private company
In the case of Lee v Lee's Air Farming, why did the liquidator try to avoid paying compensation to the widow?
Because the individual and the company were considered the same legal entity.
What is the consequence of making a solvency statement without reasonable grounds?
Fine and/or imprisonment
What key concepts were enshrined in the law through Salomon v Salomon & Co Ltd?
Separate legal personality and limited liability.
Why do treasury shares not have to be cancelled after being purchased?
To allow for re-issuance without formalities
In Macaura v Northern Life Assurance, why was M unable to claim insurance for the destroyed forest?
The company did not own the forest.
When can a company declare a dividend?
By passing an ordinary resolution
What circumstance would lead to lifting the corporate veil according to Woolfson v Strathclyde Regional Council?
'Special circumstances' indicating a facade concealing true facts.
Out of what can a company only make distributions such as paying dividends?
Distributable profits
Why was S in Held personally protected from creditor claims?
As a shareholder, S had limited liability under the law.
What is the main reason for a parent company to prepare group accounts?
To consolidate financial statements of itself and its subsidiaries.
What allows the courts to look at the identity of the shareholders of a company?
Lifting the veil
In what situation can directors of a public company be made personally liable for any loss or damage suffered by a third party?
When the company starts to trade without a trading certificate
Under which Act can a disqualified director be held jointly or severally liable for the company's debts if they participate in the management of a company?
Company Directors Disqualification Act 1986
What must be delivered to the Registrar when incorporating a Limited Liability Partnership?
Declaration of Compliance
In what scenario can a company be restrained from competition according to the case of Gilford v Horne?
When directors evade their legal obligations
Under which act are members and/or directors found to have carried out wrongful or fraudulent activities held accountable?
Insolvency Act 1986
Explore the legal concepts of separate legal personality and limited liability through the case of Lee v Lee’s Air Farming. Understand the implications of the court's decision regarding the individual's liability in relation to the company.
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