Introduction - Legal Personality and Limited Liability

Question 1

When does a company gain separate legal personality?

Answer 1

Upon incorporation, specifically the date when the Certificate of Incorporation is issued

Question 2

To whom do directors owe their duties?

Answer 2

To the company itself - not shareholders directly

Question 3

Who enters into contracts in a company?

Answer 3

The company itself.

Question 4

Principle of limited Liability?

Answer 4

Shareholders are only liable for the company’s debts up to the amount unpaid on their shares. Their personal assets are protected. s74 Insolvency Act

Question 5

Can limited liability be overridden?

Answer 5

Yes - courts can pierce the corporate veil if the company is used for fraud or is a mere facade hiding true facts