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Company Law. So…. What’s been covered?. Types of Companies. What types of companies are there? How are they defined? Can a private company become a public company? What is a 'listed' company? What is meant by a 'holding company'? What is a dormant company?

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Company law
Company Law

So…. What’s been covered?

Types of companies
Types of Companies

  • What types of companies are there? How are they defined?

  • Can a private company become a public company?

  • What is a 'listed' company?

  • What is meant by a 'holding company'?

  • What is a dormant company?

  • What is the purpose of Companies House?

Separate corporate identity
Separate corporate identity

  • What principle derives from the case of Salomon?

  • What is the effect of this principle on a company?

    Macaura v Northern Assurance Co Ltd [1925]Lee & Lee's Air Farming Ltd [1960]

  • How does this principle affect the liability of directors?

    Williams v Natural Life Health Foods [1998] 1 WLR 830

  • What about the criminal liability of companies?

    Tesco Supermarkets Ltd v Nattrass [1972] AC 153

    Moore v Bresler Ltd [1944] 2 All ER 515

  • How has the Corporate Manslaughter and Corporate Homicide Act 2007 changed criminal liability?

Lifting the corporate veil
Lifting the Corporate Veil

  • What did the courts decide in Gilford Motor Co v Horne [1933] Ch 935 and Jones v Lipman [1962] 1 WLR 832?

  • How does the decision in DHN Food Distributors Ltd v Tower Hamlets LBC [1976] 1 WLR 852 compare with the decision in Woolfson v Strathclyde Regional Council 1978 SLT 159?

  • What approach did the Court of Appeal take in Adams v Cape Industries plc [1990] Ch 433?

Company constitution
Company Constitution

  • What is the purpose of the memorandum of association? How has this changed under the 2006 Act?

  • What was the issue in Ashbury Carriage and Iron Co v Riche (1875)?

  • Is an objects clause still a requirement?

  • What is meant by ultra vires?

  • What is the relevance of s 40 CA 2006?

  • Is a Shareholders Agreement part of the Constitution?

  • What is the significance ofRussell v Northern Bank Development Corp [1992]

Pre incorporation and registration issues
Pre-incorporation and Registration issues

  • Rules relating to company names

  • Information/documents required

  • “Stationery” exercise

Nature of articles of association
Nature of Articles of Association

  • Hickman v Kent or Romney Marsh Sheep breeders Association [1915] 1 Ch 881

  • Pender v Lushington (1877) 6 Ch D 70

  • Wood v Odessa Waterworks Co (1889) 42 Ch D 636

  • Rayfield v Hands [1960]

  • Ely v Positive Government Security Life Assurance (1876) 1 Ex D 88

  • Does the Contracts (Rights of Third Parties) Act 1999 apply to the articles?

Alteration of articles
Alteration of Articles

  • What principle was stated in the case of Allen v Gold Reefs of West Africa [1900] 1 Ch 656 AC 701

  • In Greenhalgh v Arderne Cinemas Ltd [1951] what did the courts have to say about the meaning of the phrase "company as a whole"?

  • What is the "discrimination test"?

  • What is the effect of the decision in Southern Foundries (1926) Ltd v Shirlaw [1940] AC 701

  • Can a company alter its articles to expel members?

    • Sidebottom v Kershaw,Leese & Co Ltd [1920] 1Ch 154; and

    • Dafen Tinplate v Llanelly Steel Company [1920] 2 Ch 124

  • Can the court alter a company's articles?

    • Scott v Frank F Scott (London) Ltd [1940] Ch 794

Nature of shares and capital
Nature of shares and capital

  • How is a share described by the Companies Act 2006 S 540 and in the case of Borland’s Trustee v Steel Bros & Co Ltd [1901] 1 Ch 279?)

  • What is meant by 'nominal value' , 'share premium' and 'allotted at a discount‘

  • Shares can be divided into classes, where would you find the power to do this

  • What are the three main classes of shares that you might find in a company?

  • Who allots shares and where might you find the power to allot?

  • What rights do shareholders have?

  • How may the rights attached to a class of shares be varied?

  • What did the court decide in White v Bristol Aeroplane [1953] Ch 65

Allotment of shares
Allotment of Shares

Can a company allot shares to its employees?

Why might S171 be relevant in allotting shares? Howard Smith v Ampol Petroleum

What was the issue in Hogg v Cramphorn.

What are pre-emption rights? Can pre-emption rights be disapplied?

Can a member freely transfer his or her shares?

What is the relevance of Smith v Fawcett (1942)?

What other restrictions might be used on transfer? Rayfield v Hands (1960)

Company meetings
Company Meetings

  • Types – who calls them – who attends

  • Rules of Meetings – role of chair

  • Proxy?

  • Type of resolutions – how are they passed

  • What do you need to hold meeting?

  • Charitable/political donations


  • Definition?

  • What was the decision in Re Sykes (Butchers) Ltd [1998] 1 BCLC 110? How does this case compare with Secretary of State for Trade and Industry v Tjolle [1998] 1 BCLC 333?

  • What is a shadow director?

  • How does Secretary of State for Trade and Industry v Laing [1996] 2 BCLC 324 affect the definition of a shadow director?

  • How are directors appointed? When is it possible to appoint an alternate director?

  • Are there any restrictions on who can be appointed as a director?

More directors
(More) Directors

  • How do directors exercise their power in Board Meetings?

  • What is the different between an executive director and a non-executive?

  • What is the role of a company secretary?

  • What do company auditors do?


Duties - See Sections 171-177 CA 2006?

  • Acting within powers

  • Promoting success of the company?

  • Exercising independent judgement

  • Reasonable care, skill and diligence

  • Avoiding conflicts of interest

  • Not accepting benefits from 3rd parties

  • Declaring interest in proposed transactions

Capital maintenance
Capital Maintenance

  • Why maintain capital

  • Issuing new shares

  • Lending to someone to buy shares

Borrowing money and consequences
Borrowing money and consequences

  • Debentures

  • Fixed/Floating charges

  • Crystallization

  • Registering Charges

Minority shareholders
Minority Shareholders

  • “Jello”

  • Common Law

  • Statute

  • The work today (O’Neill v Phillips)

What s left
What’s left?

  • Insolvency – overview

  • Winding up a company