Business organisations

Question 1

locus classicus for Separate entity

Answer 1

Aron Saloman v A Saloman

Question 2

Can owner-controllers of business entity be guilty of stealing/dishonestly misappropriating property of business entity?

Answer 2

Yes, doctrine of separate entity

Lai Ah Kau v PP

Question 3

Can company be guilty of conspiracy with its controlling director

Answer 3

Yes, doctrine of separate entity

Nagase Singapore v Ching Kai Huat

Question 4

What is the rule in Foss v Harbottle

Answer 4

only company can sue for wrongs done to it. Proper plaintiff rule

Question 5

what does perpetual succession mean?

Answer 5

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

Question 6

what is the effect of having limited liability

Answer 6

members do not have to contribute beyond a certain amount towards the business assets in order to pay off the debts

Question 7

What is a subsidary

Answer 7

when company H controls company S1 majority shareholding

Question 8

what is a group

Answer 8

company and all its subsidaries

Question 9

“corporation” or “company” applies to foreign companies

Answer 9

corporation

Question 10

what is the governing law for a foreign company

Answer 10

the law of its place of incorporation

Question 11

where do you find all the information of sh, directors etc

Answer 11

ACRA. Note, bvi and cayman islands do not have such transparent registries. used by the rich to shelter wealth.

Question 12

Companies incorporated to avoid certain legal restrictions imposed on foreigners , like ownership of property. Do statues cover this sort of situation.

Answer 12

Yes. Residential property act, s2(1) definition of foreign person, singapore company, singapore limited liability partnership

Question 13

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?

Answer 13

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)

Question 14

When are courts reluctant to treat group as separate entity

Answer 14

In absence of fraud.

Question 15

s339(3)

Answer 15

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

Question 16

s340(2)

Answer 16

RESPONSIBILITY FOR FRAUDULENT TRADING.

Question 17

What is s339(3) read with?

Answer 17

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.

Question 18

s340(1)

Answer 18

(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

Question 19

When is the veil not actually lifted. 4 scenerios.

Answer 19

1. company doesn’t exist
2. If company holds property on TRUST for controllers
3. company is acting as AGENT/nominee FOR the CONTROLLER of company (matter of EVIDENCE)
4. when its necessary to ATTRIBUTE KNOWLEDGE/INTENTION (of certain humans) to the company

Question 20

when will an inference of agency likely to be drawn?

Answer 20

when the negotiations leading to the contract are conducted by the controller.