Personality & Liability Flashcards
Lectures 3,4,5 and Tutorial 2
Is a member entitled to expect that all of the articles of association will always be observed and enforceable against the company by him/her?
No, because the AOA are a form of statutory contract and rights derived under it apply to the membership as a whole.
Which one of the following statements most accurately reflects the nature of a shareholders’ argument?
A private contract binding upon all the shareholders which acts to supplement the AOA and that may contain provisions around how they will vote, the provision of capital, and transfer of shares.
List company constitutional documents that must also be filed at Companies House?
The AOA, special resolutions, ordinary resolutions required by statute, memorandum of association.
What scenario would most likely defeat the principle in Salomon in light of the judgement in Press v Petrodel Resources Ltd (2013)?
Deliberate frustration of the enforcement or evasion of an otherwise existing liability.
When would a duty most likely be attributed to a parent company for the actions of a subsidiary in corporate negligence?
The parent had knowledge of the subsidiary’s operations; the parent has a superior level of knowledge in the relevant area of H&S, and has produced manuals and training for the subsidiary; counsel for the claimant argues that it is far, just and reasonable to impose the duty.
With regard to the Salomon principle, list the key principles.
a) the company’s assets are shielded from a shareholder’s creditors.
b) no member or creditor has an insurable interest in the company’s assets.
c) the company is not the shareholders’ agent.
With respect to corporate groups, what is true?
Corporate groups may be organised so as to minimise the legal liabilities of individual companies in the group.
What describes a ‘limited liability’ company?
Liability for the company’s debts in an insolvency is limited to a shareholder’s initial investment (which they might lose) and the amount of any unpaid shares (which they might be required to contribute).
The shareholder of an unlimited company is required to what…
A shareholder of an unlimited company is required to contribute sums to the company in liquidation to enable the company to pay its creditors in full.
Paddy Ireland considered that limited liability institutionalises irresponsible behaviour. Which one of the following statements would appear to support this?
Directors are often offered shares as part of their remuneration package, in order to incentivise them to maximise the financial value of the company for the benefit of the shareholders as a whole.
