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<p>4 In the context of company law explain:<br/>(a) the doctrine of separate personality and its consequences; (6 marks)<br/>(b) the circumstances under which separate personality will be ignored. (4 marks)<br/>(10 marks)</p><p>4 This question asks candidates to consider the doctrine of separate personality, one of the key concepts of company law. It also<br/>requires some consideration of the occasions when the doctrine will be ignored, and the veil of incorporation pulled aside. This<br/>latter part will demand consideration of both statute and common law provisions.<br/>(a) Separate personality<br/>Whereas English law treats a partnership as simply a group of individuals trading collectively, the effect of incorporation is<br/>that a company once formed has its own distinct legal personality, completely separate from its members.<br/>The doctrine of separate or corporate personality is an ancient one, but the case usually cited in relation to separate personality<br/>is: Salomon v Salomon & Co (1897). Salomon had been in the boot and leather business for some time. Together with other<br/>members of his family he formed a limited company and sold his previous business to it. Payment was in the form of cash,<br/>shares and debentures. When the company was eventually wound up it was argued that Salomon and the company were<br/>the same, and, as he could not be his own creditor, his debentures should have no effect. Although earlier courts had decided<br/>against Salomon, the House of Lords held that under the circumstances, in the absence of fraud, his debentures were valid.<br/>The company had been properly constituted and consequently it was, in law, a distinct legal person, completely separate from</p><p>Salomon. Prior to the Companies Act 2006 (CA 2006) true single person limited companies, with only one member, could<br/>be formed but these were exceptional and in the event of the membership of an ordinary company falling below one, the<br/>remaining member assumed liability for the debts of the company. Now under s.123 CA 2006, if the number of members<br/>of a limited company falls to one, all that is required is that the fact be entered in the company’s register of members, with<br/>the name and address of the sole member.<br/>A number of consequences flow from the fact that corporations are treated as having legal personality in their own right.<br/>(i) Limited liability<br/>No one is responsible for anyone else’s debts unless they agree to accept such responsibility. Similarly, at common law,<br/>members of a corporation are not responsible for its debts without agreement. However, registered companies, i.e. those<br/>formed under the Companies Acts, are not permitted unless the shareholders agree to accept liability for their company’s<br/>debts. In return for this agreement the extent of their liability is set at a fixed amount. In the case of a company limited<br/>by shares the level of liability is the amount remaining unpaid on the nominal value of the shares held. In the case of<br/>a company limited by guarantee it is the amount that shareholders have agreed to pay in the event of the company being<br/>wound up.<br/>(ii) Perpetual existence<br/>As the corporation exists in its own right changes in its membership have no effect on its status or existence. Members<br/>may die, be declared bankrupt or insane, or transfer their shares without any effect on the company. As an abstract legal<br/>person the company cannot die, although its existence can be brought to an end through the winding up procedure.<br/>(iii) Business property is owned by the company<br/>Any business assets are owned by the company itself and not the shareholders. This is normally a major advantage in<br/>that the company’s assets are not subject to claims based on the ownership rights of its members. It can, however, cause<br/>unforeseen problems as may be seen in Macaura v Northern Assurance (1925). The plaintiff had owned a timber estate<br/>and later formed a one-man company and transferred the estate to it. He continued to insure the estate in his own name.<br/>When the timber was lost in a fire it was held that Macaura could not claim on the insurance as he had no personal<br/>interest in the timber, which belonged to the company.<br/>(iv) Legal capacity<br/>The company has contractual capacity in its own right and can sue and be sued in its own name. The extent of the<br/>company’s liability, as opposed to the members, is unlimited and all its assets may be used to pay off debts. The<br/>company may also be liable in tort for any injuries sustained as a consequence of the negligence of its agents or<br/>employees.<br/>(iv) The rule in Foss v Harbottle<br/>This states that where a company suffers an injury, it is for the company, acting through the majority of the members,<br/>to take the appropriate remedial action. Perhaps of more importance is the corollary of the rule which is that an<br/>individual cannot raise an action in response to a wrong suffered by the company.<br/>(b) Lifting the veil of incorporation<br/>There are a number of occasions, both statutory and at common law, when the doctrine of separate personality will not be<br/>followed. On these occasions it is said that the veil of incorporation, which separates the company from its members, is<br/>pierced, lifted or drawn aside. Such situations arise as follows:<br/>(i) Under the companies legislation<br/>Section 399 of the Companies Act 2006 requires accounts to be prepared by a group of related companies, thus<br/>recognising the common link between them as separate corporate entities. Section 213 of the Insolvency Act 1986<br/>provides for personal liability in relation to fraudulent trading and s.214 does the same in relation to wrongful trading.<br/>(ii) At common law<br/>As in most areas of law that are based on the application of policy decisions it is difficult to predict when the courts will<br/>ignore separate personality. What is certain is that the courts will not permit the corporate form to be used for a clearly<br/>fraudulent purpose or to evade a legal duty. Thus in Gilford Motor Co Ltd v Horne (1933) an employee had covenanted<br/>not to solicit his former employer’s customers. After he left their employment he formed a company to solicit those<br/>customers and it was held that the company was a sham and the court would not permit it to be used to avoid the<br/>contract.<br/>As would be expected the courts are prepared to ignore separate personality in times of war to defeat the activity of<br/>shareholders who might be enemy aliens. See Daimler Co Ltd v Continental Tyre and Rubber Co (GB) Ltd (1917).<br/>Where groups of companies have been set up for particular business ends the courts will usually not ignore the separate<br/>existence of the various companies unless they are being used for fraud. There is authority for treating separate<br/>companies as a single group as in DHN Food Distributors Ltd v Borough of Tower Hamlets (1976) but later authorities<br/>have cast extreme doubt on this decision. See Woolfson v Strathclyde RC (1978) and National Dock Labour Board v<br/>Pinn & Wheeler (1989). The later cases would appear to suggest that the courts are becoming more reluctant to ignore<br/>separate personality where the company has been properly established (Adams v Cape Industries plc (1990) and Ord<br/>v Belhaven Pubs Ltd (1998)).</p> duoxie ~~~ TKS hao look 谢谢duoxie
<p>新的成员,彼此加油了 </p> <p>it is hard to answer</p> <p>look at it</p> 谢谢 ,,,,,,,,,,,,,,,,, 谢谢页:
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