Business organisations Flashcards
(20 cards)
locus classicus for Separate entity
Aron Saloman v A Saloman
Can owner-controllers of business entity be guilty of stealing/dishonestly misappropriating property of business entity?
Yes, doctrine of separate entity
Lai Ah Kau v PP
Can company be guilty of conspiracy with its controlling director
Yes, doctrine of separate entity
Nagase Singapore v Ching Kai Huat
What is the rule in Foss v Harbottle
only company can sue for wrongs done to it. Proper plaintiff rule
what does perpetual succession mean?
the business entity’s separate legal personality is ENDURES even though there is a change in membership. Business entity remains in existence if theres no members
what is the effect of having limited liability
members do not have to contribute beyond a certain amount towards the business assets in order to pay off the debts
What is a subsidary
when company H controls company S1 majority shareholding
what is a group
company and all its subsidaries
“corporation” or “company” applies to foreign companies
corporation
what is the governing law for a foreign company
the law of its place of incorporation
where do you find all the information of sh, directors etc
ACRA. Note, bvi and cayman islands do not have such transparent registries. used by the rich to shelter wealth.
Companies incorporated to avoid certain legal restrictions imposed on foreigners , like ownership of property. Do statues cover this sort of situation.
Yes. Residential property act, s2(1) definition of foreign person, singapore company, singapore limited liability partnership
Exception of general principle of separate entity: when can a group (bunch of companies) be treated as a separate entity for the purposes of some statue?
If it is run as an integrated business. Depends on statue and degree of economic integration of the business.
There would be an application of purposive approach to the interpretation of statues. (Hotel Jaya)
When are courts reluctant to treat group as separate entity
In absence of fraud.
s339(3)
LIABILITY WHERE PROPER ACCOUNTS NOT KEPT
(When? in the course of the winding up of a company or in any proceedings against a company)
An officer of the company who was knowingly a party to the contracting of a debt had no reasonable or probable ground of expectation of the company’s ability to pay the debt, the officer shall be guilty of an offence and liable on conviction
s340(2)
RESPONSIBILITY FOR FRAUDULENT TRADING.
What is s339(3) read with?
s340(2) the Court (on the application of the liquidator or any creditor or contributory of the company, if it thinks proper to do so)
declare that the person shall be PERSONALLY responsible WITHOUT any LIMITATION OF LIABILITY for the payment of the whole or any part of that debt.
s340(1)
(When? in the course of the winding up of a company or in any proceedings against a company)
What? it appears that any business of the company has been carried on with intent to defraud creditors of the company or creditors of any other person or for any fraudulent purpose,
Liability: court may declare the person shall be personally responsible, without any limitation of liability, for all or any debts or liabilities of the company
When is the veil not actually lifted. 4 scenerios.
- company doesn’t exist
- If company holds property on TRUST for controllers
- company is acting as AGENT/nominee FOR the CONTROLLER of company (matter of EVIDENCE)
- when its necessary to ATTRIBUTE KNOWLEDGE/INTENTION (of certain humans) to the company
when will an inference of agency likely to be drawn?
when the negotiations leading to the contract are conducted by the controller.
