Download Company Law by Janet Dine (auth.) PDF

By Janet Dine (auth.)

ISBN-10: 0333710959

ISBN-13: 9780333710951

ISBN-10: 1349145831

ISBN-13: 9781349145836

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If a commercial undertaking prospers the persons involved will wish to expand the undertaking, which will generally require an injection of money. This can be achieved by inviting more people to contribute to the capital sum which the business uses to fund its activities. The alternative is to raise a loan. The latter course has the disadvantage of being expensive because the lender will charge interest. On the other hand, if a large number of persons are involved in a business, then this too may have considerable disadvantages.

In the Court of Appeal, Mr Salomon's appeal was dismissed. However, the House of Lords took a different view. Lord MacNaughten said: 'The company is at law a different person altogether from [those forming the company]: and, though it may be that after incorporation the business is precisely the same as it was before, and the same persons are managers, and the same hands receive the profits, the company is not in law the agent of the subscribers or trustee for them. Nor are the subscribers as members liable, in any shape or form, except to the extent and in the manner provided by the Act ...

Under the original sections in the 1985 Act, a company was deemed to control the composition of the board of directors if it could appoint or remove the holders of all or a majority of the directorships. If one company could appoint less than a majority of the directors, but those it was able to appoint had extra voting rights so that they could outvote the other directors, then control of the board's activities was effectively achieved, while the arrangement was still outside the scope of the section.

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Company Law by Janet Dine (auth.)

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