Company Law 1 - University of Wolverhampton

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2 a ‘In the Albazero [1977] AC 774 … Roskill LJ described it as a fundamental principle of Englishlaw “long established and now unchallengeable by judicial decision … that each company in agroup of companies is a separate legal entity possessed of separate legal rights and liabilities … .’Discuss.b Mary and Jacques are both directors and shareholders of Smart Furnishings plc. Jacques is gettingolder and wishes to retire soon. Mary is looking forward to Jacques leaving, although shedoes have some reservations about running the company on her own. She has always wanted tochange the company’s name to Stylish Homes plc, a name used by a company which she ran,which was placed into insolvency a few years ago. She did get into trouble with the courts regardingher running of Stylish Homes plc but she just wants to forget this now. Mary and Jacques haveboth ignored warnings from the auditors of Smart Furnishings plc regarding the company’s financialposition.Advise Mary and Jacques.(Wolverhampton LLB by Distance Learning Question.)3 a William carried on a building business as a sole trader until 1996. In 1996 he formed a companycalled Buildrite Ltd, became managing director but continued to insure the company’s assetsin his own name, as he had done before the company’s incorporation. Last month the premises ofBuildrite Ltd were damaged by fire. William has claimed under the insurance policy, but the insurancecompany refuses to meet his claim.Advise William. b Buildrite Ltd was taken over by Megabuild plc, and became one of Megabuildplc’s subsidiary companies. Megabuild plc controlled Buildrite Ltd’s activities and Buildrite Ltd’sprofits were treated as profits of the parent company.East Mercia Corporation (EMC) wishes to compulsorily acquire land belonging to Buildrite Ltd inorder to build a trading estate. Megabuild has submitted a claim for the value of the land and disturbance,but EMC has stated that in its opinion any moneysshould be paid to Buildrite Ltd.Advise Megabuild plc.c William’s contract with Buildrite Ltd contains a clause which states that in the event of his leavingthe employment of Buildrite he will not solicit their customers for a period of 18 months. He resignsas managing director and forms a new company Cementine Ltd, which is also in the building andconstruction business. He appoints Tom as a sales representative and gives Tom a lot ofBuildrite’s customers. Tom immediately begins soliciting Buildrite’s customers.Advise Buildrite.(Wolverhampton LLB by Distance Learning, May 1999, Question 3.)
Study Unit 4 Suggested minimum study hours: 15TopicMemorandum of Association, the Rule in Turquand’s Case and AgencyPrinciplesIntroductionA company’s memorandum is a document which outlines the scope of a company’s powers andregulates a company’s relationship with the outside world.Objectivesa To consider the original purpose behind the requirement that the objects of the company shouldbe stated in the memorandum and how this has been affected by decisions in this century.b To look at the provisions of the Business Names Act 1985 on business names. What is the purposebehind these provisions?c To consider the current legal position regarding the ultra vires doctrine, and the power of companyofficers to bind the company in contract.Essential ReadingThese titles have been supplied as part of your study materials.Company Law by John Lowry and Alan Dignam OUP 2006Statutes on Company Law 2007-2008Cases and Materials on Company Law (Andrew Hicks and S Goo)General ReadingThese titles have not been supplied and are not essential reading, but you may wish to refer tothem to further your understanding. Gower and Davies: the Principles of Modern Company Law,Davies – Relevant Chapter(s)Case law and statutesAshbury Railway Carriage and Iron Co Ltd v Riche (1875) LR 7 HL 653Bell Houses Ltd v City Wall Properties Ltd [1966] 2 QB 656Charterbridge Corporation Ltd v Lloyds Bank Ltd [1969] 2 All ER 1185Cotman v Brougham [1918] AC 514Evans v Brunner, Mond & Co Ltd [1921] 1 Ch 359First Energy (UK) Ltd v Hungarian International Bank Ltd [1993] BCC 533Freeman & Lockyer v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480Halt Garage (1964) Ltd, Re [1982] 3 All ER 1016Hely-Hutchinson v Brayhead Ltd [1967] 3 All ER 98Horsley and Weight Ltd, Re [1982] 3 All ER 1045; [1982] 3 WLR 431International Sales and Agencies Ltd v Marcus [1982] 3 All ER 551Introductions Ltd, Re [1970] Ch 199Lee Behrens & Co Ltd, Re [1932] 2 Ch 46Mahony v East Holyford Mining Co (1875) LR 7 HL 869
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Company Law 1 - University of Wolverhampton

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