1. A company has a separate legal personality from the members in the company so in law it has separate rights and liabilities. The company can enter contracts and own property which wouldn't make the members of the company liable only the company itself. The case which illustrates this is Salomon v Salomon & co (1897) Salomon formed a limited company to take over his business, himself, his wife, his daughter and four of his sons each subscribed for one share. When the company fell on hard times and the liquidator was appointed salomon was entitked to be paid before the unsecured trade creditors as he was a secured creditor. In this case the trade creditors recieved nothing and the unsecured creditors claimed all the remaining assets on the ground that the company was a mere alias or agent for salomon. It was held that salomen was entitled to the remaining assets in payment of the secured debentures held by him as a company is, at law, a distinct and separate person from the people setting up the company and once an ossociation has incorporated the company was an independent entity and seperate from those who had set it up. Any fully paid up shareholders could not be required to pay anymore. If a company is to become insolvent then the creditors do not get paid regardless of the personal financial situations of its members. Conversely where a company owns assets then those assets belong to the company and not its members. Incorporation weils its members from outsiders but on occasions the law is preared to lift the veil of incorporation. This would happen when a companys shareholders use the company to avoid their reponsibilities and lift the veil to enforce the law which is permitted under a number of statutes.
2. A public company must have a share capital over 50,000. They must obtain a trading certificate from the registrar before they can do any business or exercise any borrowing powers. You can obtain your certificate by sending an application to the...
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