Consequences of incorporation and piercing the veil

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  • Created by: mellon
  • Created on: 29-04-14 20:16
What is the liability of a shareholders liability?
Par/nominal value of shrares, at first value issued, not market value
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What is the main case?
Salomon v Salomon - only the assets of a company can be used to pay debts
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What other cases are there?
Macuara v Nothern Insurance - took out insurance for himself when company owned property. Lee Air Farming - had all but one share and was director but was employee. Could get workers comp as employee
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Can actions of directors be attributed to company?
Yes, Meridan Global. Look at articles and general rules of attribution
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What is an associated company?
A company owns less than half the subsidiary voting rights
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What is a holding company?
Company that holds shares in another company, has majority of voting rights
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What is a subsidiary company?
One that is owned by a holding
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What are the old law cases for piercing the veil?
DHN - compulsory purchase of land from sub, Woolfson - only appropriate in special circumstances when it is a facade, Adam v Cape Industries - not just from justice
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What are the tests now?
Prest v Petrodel - evasion principle - using another company to avoid legal obligation of the real actors. Concealment principle - concealing the real actors using a corporate structure
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Other cards in this set

Card 2

Front

What is the main case?

Back

Salomon v Salomon - only the assets of a company can be used to pay debts

Card 3

Front

What other cases are there?

Back

Preview of the front of card 3

Card 4

Front

Can actions of directors be attributed to company?

Back

Preview of the front of card 4

Card 5

Front

What is an associated company?

Back

Preview of the front of card 5
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