Fundamentals Of Company Law Flashcards
What is a company in legal terms?
A company is a legal entity created by statute, separate from its owners, with the ability to enter contracts, own assets, sue, and be sued.
What legislation governs companies in Ireland?
The Companies Act 2014 (CA 2014).
How is a company formed?
By registering with the Companies Registration Office (CRO) and receiving a Certificate of Incorporation.
What is the Entity Theory?
A company is a separate legal entity from its members, capable of owning property, suing, and being sued.
What is the Concession Theory?
Companies exist as a privilege granted by the state, so they are subject to government regulation.
What is the Contract Theory?
A company’s constitution acts as a contract between the company and its shareholders.
What case established the principle of separate legal personality?
Salomon v A. Salomon & Co Ltd (1897).
What does separate legal personality mean?
The company exists independently of its shareholders, meaning shareholders are not personally liable for company debts.
Can a company sue and be sued?
Yes, because it has separate legal personality.
What does ‘limited liability’ mean?
Shareholders’ liability is limited to the unpaid amount on their shares.
Are shareholders personally responsible for company debts?
No, unless they have given personal guarantees.
Who is liable if the company goes bankrupt?
The company itself, not its shareholders.
Who owns the company?
Shareholders – but they do not manage the business.
Who manages the company?
Directors, appointed by shareholders.
Who ensures legal compliance?
The Company Secretary.
Who audits the company’s financial records?
Auditors.
What are the three ways companies can be classified by formation?
Chartered Corporations – Created by royal charter.
Statutory Corporations – Created by legislation (e.g., Irish Water).
Registered Corporations – The most common type.
What are the three types of companies based on liability?
Companies Limited by Shares (LTD) – Liability limited to unpaid shares.
Companies Limited by Guarantee – Common for charities; members’ liability is capped at a fixed amount.
Unlimited Companies – No limit on members’ liability.
What is the difference between a private limited company (Ltd) and a public limited company (PLC)?
Ltd: Max 149 members, cannot trade shares publicly.
PLC: No max members, can list shares on the stock exchange.
What documents are required to register a company?
Company name
Company constitution
Director(s) & Secretary details
Registered office address
Who is responsible for forming a company?
A promoter.
What document proves a company’s existence?
The Certificate of Incorporation.
What are the key effects of incorporation?
Separate legal existence
Perpetual succession
Limited liability
Ability to enter contracts
Can sue and be sued
Can a company borrow money?
Yes, by securing loans using floating charges on assets.
