SALOMAN v. SALOMAN & CO.

LTD (1897)
Company is a legal entity separate and distinct from the individuals who compose it The company is not in law the agent of the members Salmon had a boot business. Company framed wife, daughter & four sons He himself took ,20000 shares Due to strike in the boot trade the company was wound up. Unsecured creditors claimed that same person

 5 persons are the only members of a private company. All of them go in a boat on a pleasure trip into the open sea. Due to accident all the five being drowned. Does the private company cease to exist. A husband and wife, who were the only 2 members of a private ltd. Com.are shot dead by daciots. Does the company also dies with them?

 A , a trader carried on business under the name of A& Co. Ltd. Without being registered as a company with limited liability. Discuss the consequences of the act of A. A association of 12 members starts a banking business without being registered. 4 members retire.

Rule in Peels case 1867

A certificate of incorporation given by the registrar in respect of a company is conclusive certificate that all formalities complied with. Date borne by the certificate of incorporation is the DOB. That a asson. is a company auhtorised to be registered under the Act and has been duly registered.

 A MOA of a company was signed by 7 persons, but the signatures of the five members were forged by the two members and the certificate of incorporation was duly obtained. Is the certificate of incorporation is valid.

 A company was formed to improve and encourage the breeding of poultry. The MOA prohibited the payment remuneration to the managers. The companys business expanded and it now wants to pay remuneration for efficient mgt of affairs. Can the company alter the object. A company was formed to carry on mining business. After some time the company wants to start an additional business in rubber and wants to amend the object clause of MoA. Advise the company.

 A company was formed for the manufactured of artifical silk from the yarn purchased from the market. Now the company wants to alter its MOA so as to authorize itself to manufacture yarn (wool, thread) for the purpose of manufacturing the artificial silk. Advise the company. The alteration would be justified as the new business can be conveniently and advantageously be combined with the existing business.

 A company was authorized by its MOA to pay pension to former employees, their widows and children. One of the former directors of the company died and five yrs after his death, the company decided to pay a fixed amount to his widow as pension. Is the company justified in doing so?

Macaura v Norhtern Assurance Co. Ltd.1925 A share holder can not insure the companys property in his own name even if he is the owner of all or most the companys shares. M insured the companys timber in his own name. the timber was destroyed by fire and M claimed the loss. Held insurance company was not liable.

Daimler Co. Ltd. v. Continental Tyre and Rubber Co. Ltd. 1916
A company may assume an enemy character when persons in de facto control of its affairs are residents in any enemy country or whatever residents are acting under the control of enemies.

Facts of the case

C, a private company was incorporated in England for the purpose of selling the motor tyres manufactured in Germany by a Germany company. The German company held the bulk of the shares in the company C and all the directors were Germans resident in Germany. The House of Lords held that the Company C was an enemy company for the purposes of trading because its

Gilford Motor Co Ltd v Horne (1933)

Facts Horne was a car salesman and left Gilford Motor Co Ltd. His contract stated that he wasnt allowed to sell to Gs customers for a period after leaving. Horne set up a company which then approached his former customers. Issue involved He argued that firstly his company was approaching the customers Secondly, if there was wrongdoing, his company was liable and not him.

Lee v Lees Farming Co., Ltd 1960

Of the 3,000 shares in a company L held2,999. He voted himself as the governing director and chief pilot as a salary. L was killed in an air crash while working fro the company. His widow claimed compensation fro injuries to her husband while in the course of his employment. It was argued that no compensation was due because L and Lees air Farming

Contd
Decision: The courts held that the company was mere a sham/ cloak for the purpose of enabling the defendant to commit a breach of his agreement. As the company was incorporated for evading the contractual obligations, the court has disregard the separate existence of the company. Hence, Horne is liable.

Ashbury Railway Carriage and Iron Co.Ltd v. Riche If an act is ultra vires the memorandum, it is binding upon the company. A ultra vires contract is void and incapable of ratification, even if every member wants to ratify it.

 The AoA of a company contained a provision that the directors have power to borrow money on bonds if authorized by a resolution passed at a general meeting of the company. The directors borrowed money from A and issued bonds to him without passing such resolution. Is As interest is protected? Give reasons.