Company Law And Corporate Governance Flashcards
(44 cards)
What are the main sources of Company Law?
Common law and statute.
What is the significance of S170(4) Companies Act 2006?
It states that general duties shall be interpreted in the same way as common law rules or equitable principles.
How were registered companies viewed until the late 19th century?
As large partnerships with transferable shares rather than separate legal persons.
What is the historical significance of the Russia Company in 1557?
It was granted a royal charter, giving it exclusive trading privileges with Russia.
Which company was granted a royal charter in 1599?
The English East India Company.
What event is associated with the first large-scale corporate scandal?
The speculation in the South Sea Company in 1711.
What did the Bubble Act of 1720 establish?
Companies could only be founded after a Charter issued by the Crown or a specific parliamentary Act.
What was the purpose of the Joint Stock Companies Act 1844?
It created a Registrar of Joint Stock companies.
What did the Limited Liability Act 1855 accomplish?
It was the first law to grant limited liability to companies in the UK.
What did the Joint Stock Companies Act 1856 revise?
The system of registration for companies, which is largely in operation today.
What is legal personality in the context of a corporation?
The company is a separate legal entity, independent from its owners, capable of existing perpetually, suing and being sued, and producing legal actions like a human.
It is born with the certificate of incorporation.
What is limited liability?
In case of insolvency, each shareholder is liable for corporate debts only up to the amount of their investment in the company, protecting their personal property.
This allows shareholders to invest without risking personal assets.
What was established in the case of Salomon v. Salomon [1897] AC 22?
The House of Lords ruled that a company is a different legal person from its owners, establishing a complete separation between the company and those involved in its operation.
What does Section 9 of the Companies Act 2006 require for incorporation?
It requires the delivery of the memorandum, the application for registration, and a statement of compliance to the Registrar of Companies for England and Wales, or for Scotland if applicable.
What must the Registrar do if the requirements of the Companies Act 2006 are satisfied?
He must register the documents delivered to him.
What does Section 15 of the Companies Act 2006 provide?
To give a certificate that the company is incorporated.
What is the significance of the certificate of incorporation under S15(4)?
It is conclusive evidence that the requirements of the Act have been met and the company is duly registered.
What is the effect of registration as per Section 16(1)?
The registration of a company has effects as from the date of incorporation.
Who are considered a body corporate upon incorporation?
The subscribers to the memorandum and other persons who become members of the company.
What functions can a body corporate exercise?
It is capable of exercising all the functions of an incorporated company.
What details are stated in connection with the application for registration?
The status and registered office of the company.
What happens to subscribers to the memorandum in a company with share capital?
They become holders of the shares specified in the statement of capital and initial shareholdings.
What happens to persons named as officers in the statement of proposed officers?
They are deemed to have been appointed to that office.
What is the status of a company until it is registered?
It has no existence of any kind.
