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Questions and Answers
Promoters are responsible for forming a company but not for starting it
Promoters are responsible for forming a company but not for starting it
False
There are 4 kinds of promoters mentioned in the text
There are 4 kinds of promoters mentioned in the text
True
A professional promoter is specialized in the job of promoting the company
A professional promoter is specialized in the job of promoting the company
True
An entrepreneurial promoter only forms the idea and does not bring the company into existence
An entrepreneurial promoter only forms the idea and does not bring the company into existence
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One of the functions of a promoter is to choose suitable people as first directors
One of the functions of a promoter is to choose suitable people as first directors
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Promoters have 5 duties according to the text
Promoters have 5 duties according to the text
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Board members who vote against any resolution will not be liable when they explicitly express their objection during the meeting.
Board members who vote against any resolution will not be liable when they explicitly express their objection during the meeting.
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Being absent from the meeting is not an excuse to be relieved from liability, unless the absent member has either been unaware of the resolution or was unable to object after being aware.
Being absent from the meeting is not an excuse to be relieved from liability, unless the absent member has either been unaware of the resolution or was unable to object after being aware.
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The shareholder GA meetings will be chaired by the chairman of the board or the vice chairman, if the chairman is absent. If both are not possible, the shareholders will vote for a board member to chair the meeting.
The shareholder GA meetings will be chaired by the chairman of the board or the vice chairman, if the chairman is absent. If both are not possible, the shareholders will vote for a board member to chair the meeting.
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A shareholder has the right to attend the GA meetings even if the AOA says otherwise and may even assign someone other than a board member to attend on his behalf.
A shareholder has the right to attend the GA meetings even if the AOA says otherwise and may even assign someone other than a board member to attend on his behalf.
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Different means of technology may be used to hold the meetings.
Different means of technology may be used to hold the meetings.
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The call for the assembly meeting should be made 21 days before the meeting.
The call for the assembly meeting should be made 21 days before the meeting.
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Companies can never be held liable for crimes that do not require a mental element like intention
Companies can never be held liable for crimes that do not require a mental element like intention
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The corporate veil refers to the separation between a company and its shareholders, allowing the company to own property, sue and be sued in its name, and have a never-ending existence
The corporate veil refers to the separation between a company and its shareholders, allowing the company to own property, sue and be sued in its name, and have a never-ending existence
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Lifting the corporate veil means that the court acknowledges the existence of the corporation and upholds its separate legal identity
Lifting the corporate veil means that the court acknowledges the existence of the corporation and upholds its separate legal identity
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For benefit of revenue is a statutory ground on which the corporate veil may be lifted
For benefit of revenue is a statutory ground on which the corporate veil may be lifted
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Joint stock company's capital must not be less than 500k riyals, and the paid up amount may not be less than one quarter of the value
Joint stock company's capital must not be less than 500k riyals, and the paid up amount may not be less than one quarter of the value
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Board members of a joint stock company can serve for a term exceeding 4 years unless otherwise stated in the Articles of Association
Board members of a joint stock company can serve for a term exceeding 4 years unless otherwise stated in the Articles of Association
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Failure to disclose can result in the sale being rejected or the promoter being required to give back profits.
Failure to disclose can result in the sale being rejected or the promoter being required to give back profits.
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Pre-corporation contracts are void unless authorized by the terms of incorporation and communicated to the company.
Pre-corporation contracts are void unless authorized by the terms of incorporation and communicated to the company.
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The MOA sets out the name, registered office, objective, liability, capital, and association of the company.
The MOA sets out the name, registered office, objective, liability, capital, and association of the company.
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The name clause requires a unique and permitted name, with 'limited' or 'private limited' as the last word.
The name clause requires a unique and permitted name, with 'limited' or 'private limited' as the last word.
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The Doctrine of Ultra-vires refers to acts beyond the powers given by the MOA or AOA.
The Doctrine of Ultra-vires refers to acts beyond the powers given by the MOA or AOA.
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The Ashbury Railway case illustrates the application of the Doctrine of Ultra-vires when the company's objectives in the Memorandum differed from the work agreed in the contract.
The Ashbury Railway case illustrates the application of the Doctrine of Ultra-vires when the company's objectives in the Memorandum differed from the work agreed in the contract.
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True or false: The Doctrine of Constructive Notice aims to protect the company from outsiders trying to trick it and to hold them accountable for contractual liabilities.
True or false: The Doctrine of Constructive Notice aims to protect the company from outsiders trying to trick it and to hold them accountable for contractual liabilities.
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True or false: The Doctrine of Indoor Management offers protection to outsiders who deal with the company, assuming compliance with internal management and procedures.
True or false: The Doctrine of Indoor Management offers protection to outsiders who deal with the company, assuming compliance with internal management and procedures.
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True or false: In the case of Salomon v. Salomon, the company was treated as a separate legal entity from its owner, even though the owner held most of the shares.
True or false: In the case of Salomon v. Salomon, the company was treated as a separate legal entity from its owner, even though the owner held most of the shares.
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True or false: A company's property and debt belong to the company, not the owner.
True or false: A company's property and debt belong to the company, not the owner.
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True or false: Companies can contract with members, directors, and outsiders.
True or false: Companies can contract with members, directors, and outsiders.
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True or false: In the case of Lee's Air Farming Ltd, Mrs. Lee was entitled to compensation for her husband's death because he was the managing director when he gave himself orders as a pilot.
True or false: In the case of Lee's Air Farming Ltd, Mrs. Lee was entitled to compensation for her husband's death because he was the managing director when he gave himself orders as a pilot.
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Study Notes
- The directors of a company entered into a contract for financing a foreign railway line, which was later rejected by the company.
- Riche, the contractor, sued the company for breach of contract.
- The contract was held void as ultra-vires, meaning it was beyond the company's authorized objectives and couldn't be made valid by ratification.
- The Doctrine of Constructive Notice states that a person is expected to inspect the company's Memorandum of Association (MOA) and Articles of Association (AOA) before dealing with the company.
- This doctrine aims to protect the company from outsiders trying to trick it and to hold them accountable for contractual liabilities.
- The Doctrine of Indoor Management offers protection to outsiders who deal with the company, assuming compliance with internal management and procedures.
- Exceptions to this doctrine include knowledge of irregularity, suspicion, forgery, acts outside apparent authority, non-existence of agency, and acts ultra vires the company.
- The MOA and AOA outline the company's objectives, powers, and internal regulations that govern its relationship with outsiders and its internal management.
- In the case of Salomon v. Salomon, the company was treated as a separate legal entity from its owner, even though the owner held most of the shares.
- A company's property and debt belong to the company, not the owner.
- Companies can contract with members, directors, and outsiders.
- Companies can commit torts and crimes.
- In the case of Lee's Air Farming Ltd, Mrs. Lee was entitled to compensation for her husband's death because he was the managing director when he gave himself orders as a pilot.
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Description
Test your knowledge of ultra vires and breach of contract with this quiz. Explore a case where a contract was deemed void as it fell outside the company's objectives, leading to a breach of contract lawsuit.
