Commercial and Corporations Law - Assignment
Added on 2021-04-17
8 Pages2477 Words57 Views
|
|
|
Running head: COMMERCIAL AND CORPORATION LAWCommercial and Corporation LawName of the StudentName of the UniversityAuthor note
1COMMERCIAL AND CORPORATION LAWQuestion 1:IssueThe concern of the case is to determine whether an issue of a certificate ofincorporation a company will become a separate legal entity from its shareholders. RuleAs per the Companies Act, 2006 a company is incorporated under this act and can become aseparate legal entity from its shareholders. When a company becomes registered under theCompanies Act, it becomes a separate legal entity. It is regarded as a separate entity from itsshareholders, directors and promoters at law. A legal person is considered as a being or entitywho has the ability to obtain enforceable legal rights and become subjected to enforceableliabilities and legal obligations. These principles were drafted in clarity under the CompaniesAct. The principles of the separate legal personality of a company are a significant part of thecompany law as observed. There are consequences of a separate legal entity. Since anindividual is separated from the members, the organization itself charges the business andenters into contracts. A separate legal entity is a company has the right to transfer and createcontracts in its own name. If one of the shareholders forms a company, the company has thepower to employ him under a contract of employment. Therefore, that person such a personwould be playing the role of a shareholder, employee and a director of the companysimultaneously. Thereafter, if the principle of separate legal personality is applied then itwould be a one hand company and in another way one person in three functions. It describesthe link between the entities of the company and guarantees that are correlated rights such ascompensation. In the case of Solomon v Solomon & Co Ltd 1897 AC22, it introduced theconcept of a separate legal entity personality of a company. In the said case, Mr. Solomoncan be distinguished entirely from the company. A separate legal entity and the liability of the
2COMMERCIAL AND CORPORATION LAWmembers are limited by shares and guarantee (Bainbridge 2015). According to theCompanies Act, when a company acquires its own property the shareholders does not haveany direct rights to the company. They cannot exercise any power or rights on the companybeing the shareholder. This instance was proved in the case of Macaura v NorthernAssurance Co 1925 AC619. In this particular case, Mascaura had shifted timber from hisestate to his company and extracted the insurance particularly with his own name instead ofthe name of the company. Thereafter, the timber was ruined in a fire. In the matter of Battle vIrish Art Promotion Centre Limited [1968] IR 252, the Court had decided that while anindividual represents himself in the Court, a company can only be characterized by a lawyer.The veil of corporation is involved in such cases. However, the veil of incorporation can havea few circumstances. The Court can only be disregarded by the court depending on thematter. The Companies Act discussed about the incorporated and unincorporated business.As per law, incorporated business, which is also known as a corporation is a separate legalentity from the owner of the business and it has natural rights (Dyllick & Muff 2016). On theother hand, the unincorporated businesses are defined as the sole proprietor or the partnershipcompanies. A company resolution is treated as a corporate action that comes in form of alegal document on which the board of directors can vote. Under the Companies Act, 2006 itis defined as a formal method in which companies jot down the decisions made by thecompany members in the meeting. However, under the Corporations Act, 2001 maximumnumber of decisions that affect the needs of the company should be made by a resolution. Asper the Corporations Act, 2001 the major decisions that affect the company’s need to be madeby a resolution. Constitution of a company has its own set of rules in the constitution. For aresolution to get passed it must go through the criteria process (Grayson & Hodges 2017).The resolution is usually passed at a meeting. It puts the resolution in the records of thecompany within one month of the meeting being held. However, three of these constituents
End of preview
Want to access all the pages? Upload your documents or become a member.
Related Documents