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United Kingdom company law is governed by the Companies Act 2006. The Insolvency Act 1986, the Company Director Disqualification Act 1986, and the old Companies Act 1985 are also important statutes. It applies across the United Kingdom, and is highly influential within Europe around the world.
Contents |
History
- Mercantilism and Guilds
- British East India Company
- South Sea Bubble
- Joint Stock Companies Act 1844
- Limited Liability Act 1855
- Joint Stock Companies Act 1856
- Bullock Report
- Cadbury Report
- Combined Code
Corporate governance
- See also: Corporate governance
Personality and liability
- See also: Separate legal personality and Limited liability
- Case of Sutton's Hospital (1612) 10 Rep. 32.; 77 Eng Rep 960, 973,1 per Edward Coke,
"And it is great reason that an Hospital in expectancy or intendment, or nomination, shall be sufficient to support the name of an Incorporation, when the Corporation itself is onely in abstracto, and resteth onely in intendment and consideration of the Law; for a Corporation aggregate of many is invisible, immortal, & resteth only in intendment and consideration of the Law; and therefore in 39 H. 6. 13b. 14 a. Dean and Chapter cannot have predecessor nor successor. 21 E. 4. 27. & 30 E. 3. 15. 6. They may not commit treason, nor be outlawed, nor excommunicate, for they have no souls, neither can they appear in person, but by Attorney33 H. 8. Br. Fealty. A Corporation aggregate of many cannot do fealty, for an invisible body cannot be in person, nor can swear, Plow. Com. 213, and The Lord Berkley’s Case 245, it is not subject to imbecilities, or death of the natural, body, and divers other cases."
- Northern Counties Securities Ltd. v. Jackson & Steeple Ltd. [1974] 1 WLR 1133, per Walton J,
"Mr. Price argued that, in effect, there are two separate sets of persons in whom authority to activate the company itself resides. Quoting the well known passages from Viscount Haldane L.C. in Lennard's Carrying Co. Ltd. v. Asiatic Petroleum Co. Ltd. [1915] A.C. 705, he submitted that the company as such was only a juristic figment of the imagination, lacking both a body to be kicked and a soul to be damned."2
- Lennard's Carrying Co Ltd v Asiatic Petroleum Co Ltd [1915] AC 705, per Lord Haldane,
"My Lords, a corporation is an abstraction. It has no mind of its own any more than it has a body of its own; its active and directing will must consequently be sought in the person of somebody who is really the directing mind and will of the corporation, the very ego and centre of the personality of the corporation."
- Bolton v Graham & Sons Limited, per Lord Denning,
"A company may in many ways be likened to a human body. It has a brain and nerve centre which controls what it does. It also has hands which hold the tools and act in accordance with directions from the centre... (the) directors and managers represent the directing mind and will of the company and control what it does. The state of mind of these managers is the state of mind of the company and is treated by the law as such."
- Salomon v Salomon & Co [1897] AC 22
- Adams v Cape Industries plc [1990] Ch 433
- Piercing the corporate veil
- Company Formation - details for how to form a UK company.
- Public limited company, Private company limited by shares, European Company Statute, Company limited by guarantee, Unlimited company, Community interest company, Limited Liability Partnerships Act 2000
- Articles of association (law) and Memorandum of association, Table A (now "Model Articles")
- F Goldsmith (Sicklesmere) Ltd v Baxter [1970] 1 Ch 85
Shareholders
- Shareholders' meeting
- s.168 Companies Act 2006 (previously s.303), allowing an ordinary majority of shareholders to appoint and remove directors
- Shareholders' agreement
Directors
- See also: Board of directors and Fiduciary
- Promoting company success - s.172
- Hutton v. West Cork Railway Co (1883) 23 Ch D 654, per Bowen LJ,
"money which is not theirs but the company’s, if they are spending it for the purposes which are reasonably incidental to the carrying on of the business of the company. That is the general doctrine. Bona fides cannot be the sole test, otherwise you might have a lunatic conducting the affairs of the company, and paying away its money with both hands in a manner perfectly bona fide yet perfectly irrational… It is for the directors to judge, provided it is a matter which is reasonably incidental to the carrying on of the business of the company… The law does not say that there are to be no cakes and ale, but there are to be no cakes and ale except such as are required for the benefit of the company."
- Care and skill - s.174
- Re Barings plc (No.5) [1999] 1 BCLC 433
- Re D’Jan of London Ltd [1994] 1 BCLC 561
- Duty of loyalty - s.175 CA 2006
- Keech v. Sandford (1726) Sel Cas. Ch.61
- Aberdeen Railway v. Blaikie (1854) 1 Macq HL 461, per Lord Cranworth,
"A corporate body can only act by agents, and it is, of course, the duty of those agents so to act as best to promote the interests of the corporation whose affairs they are conducting. Such agents have duties to discharge of a fiduciary nature towards their principal. And it is a rule of universal application that no one, having such duties to discharge, shall be allowed to enter into engagements in which he has, or can have, a personal interest conflicting or which possibly may conflict, with the interests of those whom he is bound to protect... So strictly is this principle adhered to that no question is allowed to be raised as to the fairness or unfairness of the contract entered into..."
- Regal (Hastings) Ltd v Gulliver [1942] All ER 378
- Hogg v. Cramphorn Ltd. [1967] Ch 254
Employees
- s.172 Companies Act 2006 (see previously, s.309 Companies Act 1985)
- Bullock Report and Codetermination
Contracting parties
- Royal British Bank v Turquand (1856) 6 E&B 32
- Agency (law), Apparent authority and Ostensible authority
- See now ss.39-40 Companies Act 2006 (previously ss.35 and 35A Companies Act 1985)
Derivative actions
- Foss v Harbottle (1843) 2 Hare 461, 67 ER 189
Unfair prejudice
- s.994 Companies Act 2006 (previously, s.459)
- Mutual Life Insurance Co. of New York v. The Rank Organisation Ltd. [1985] BCLC 11
Corporate finance
- See also: Corporate finance
- Kellar v. Williams [2000] 2 BCLC 390
- Pilmer v. Duke Group Ltd [2001] 2 BCLC 773
Shares
- See also: Share capital, Authorised share capital, and Issued share capital
- Establishing rights
- Birch v. Cropper (1889) 14 App Cas 525
- Scottish Insurance Corporation v. Wilsons & Clyde Coal Co Ltd [1949] AC 462
- Dimbula Valley (Ceylon) Tea Co v. Laurie [1961] Ch 353
- Will v. United Lankat Plantations Co Ltd [1914] AC 11
- Re Bradford Investments Ltd [1991] BCLC 224
- Varying rights
- Companies Act 2006, s.21(1), s.25
- Citco Banking Corporation NV v. Pusser's Ltd [2007] 2 BCLC 4833
- Companies Act 2006, s.629, s.630, s.633
- Greenhalgh v. Arderne Cinemas [1946] 1 All ER 512
- Cumbrian Newspapers Group Ltd v. Cumberland & Westmoreland Herald Ltd [1987] Ch 1
- Companies Act 2006, s.22-24
- Russell v. Northern Bank Development Corp Ltd [1992] 3 All ER 161
- Issuing shares
- Companies Act 2006, s.10, s.617
- Re Scandanavian Banking Group plc [1988] Ch 87
- Companies Act 2006, s.542, 580, 588-9
- Ooregum Gold Mining Co of India v. Roper [1892] AC 125
- Mosely v. Kofffontein Mines Ltd [1904] 2 Ch 108
- Hilder v. Dexter [1902] AC 474
- Paul Myners, Pre-Emption Rights: Final Report (2005) DTI, .pdf
Legal capital and creditor security
- Second EC Directive 77/91/EEC on minimum capital maintainence for public listed companies, as amended by 2006/68/EC
- Re Wragg Ltd [1897] 1 Ch 796
- Insolvency Act 1986, ss.213-215
- Company Directors Disqualification Act 1986, ss.6-7
- Colin Gwyer Associates Ltd v. London Wharf (Limehouse) Ltd
- Adams v. Cape Industries [1990] Ch 433
- Re Hydrodam (Corby) Ltd [1994] 2 BCLC 180
Dividends
- See also: Dividends
- Shearer v. Bercain Ltd [1980] 3 All ER 295
- Re Halt Garage [1982] 3 All ER 1016
- Aveling Barford Ltd v. Period Ltd [1989] BCLC 626
- Re Exchange Banking Co (1882) 21 Ch D 519
- Bairstow v. Queen's Moat Houses plc [2001] 2 BCLC 531
- Re Marini [2004] BCC 172
Reduction of capital
- See also: Reduction of capital
- Trevor v. Whitworth (1887) 12 App. Cas. 409
- Re Chatterly-Whitfield Collieries ltd [1948] 2 All ER 593
- Re Saltdean Estate Co Ltd [1968] 3 All ER 829
- Re Northern Engineering Industries plc [1994] 2 BCLC 704
Financial assistance
- Barclays Bank Ltd v. British & Commonwealth Holdings plc [1996] 1 All ER 381
- Chaston v. SWP Group plc [2003] 1 BCLC 675
- Anglo Petroleum Ltd v. TFB (Mortgages) Ltd [2007] BCC 407
- Brady v. Brady [1988] 2 All E R 617
Prospectuses and disclosure
- Directive 2001/34/EC (Listing Directive) Art.42 - 51
- Financial Services and Markets Act 2000, ss.74-8
- R v. International Stock Exchange, ex parte Else [1993] QB 534
- Directive 2003/71/EC on the prospectus to be published when securities are offered to the public or admitted to trading and amending Directive 2001/34/EC
- Derry v. Peek (1889) L R 14 App Cas 337
Insider dealing
- Directive 2003/6/EC
- Directive 2003/124/EC on the definition and public disclosure of inside information and the definition of market abuse
- Re an Inquiry under the Company Securities (Insider Dealing) Act 1985 [1988] 1 AC 660
- Rigby and Bailey v. R [2006] 1 WLR 306
Corporate insolvency
- Insolvency Act 1986, as amended by the Enterprise Act 2002
- Liquidation, Administration order, Administrative receivership and floating charge
- Creditor, Secured creditor, Unsecured creditor, Preferential creditor
- National Westminster Bank plc v Spectrum Plus Limited [2005] UKHL 41
- Trading while insolvent (UK)
- Wrongful trading, s.214 IA 1986, Fraudulent trading, s.213 IA 1986,
- Undervalue transaction
Mergers and acquisitions
In company law there are three main areas that regulate mergers and acquisitions (also, reconstructions or takeovers).
- Insolvency Act 1986, ss.110-111, on schemes of arrangement or reconstructions
- Companies Act 2006, Parts 26 (ss.895-901) and Part 27 (special rules for public companies), on arrangements, reconstructions, mergers (or amalgamations) or divisions (demerger or "scission"). The rules here implement the Third and Sixth EC Company law directives.
- Companies Act 2006, Part 28, on takeovers. s.979 gives a takeover bidder who has already acquired 90% of a company's shares the right to compulsorily buy out the remaining shareholders (squeeze out). Conversely s.983 allows minority shareholders to insist their stakes are bought out. The Panel on Takeovers and Mergers, established in 1968, oversees Companies Act duties, including those laid down in the European Directive on Takeover Bids (2004/25/EC)
Other issues
- Tesco Supermarkets v Nattrass [1972] AC 153
- Corporate manslaughter (England and Wales) and Corporate Manslaughter and Corporate Homicide Act 2007
See also
- Corporate law
- Corporate social responsibility
- Insolvency Service
- Companies House
- Board of Trade
- Department for Trade and Industry
- Department for Business, Enterprise and Regulatory Reform
- Other company law
- European Company Statute
- Delaware corporation
- Aktiengesellschaft, Vorstand, Aufsichtsrat and Mitbestimmung
Notes
- ^ Case of Sutton's Hospital (1612) 10 Rep. 32.; 77 Eng Rep 960, 973
- ^ n.b. Lord Haldane never used such figurative words. They may trace back to Lord Chancellor Thurlow (1731–1806), who is said to have asked rhetorically, "did you ever expect a corporation to have a conscience, when it has no soul to be damned and no body to be kicked?" Though it seems his exact phrase was, "Corporations have neither bodies to be punished, nor souls to be condemned; they therefore do as they like." John Poynder Literary Extracts (1844) vol. 1, p. 2 or 268
- ^ c.f. Gambotto v. WCP Ltd (1995) 127 ALR 417
References
- Len Sealy and Sarah Worthington (2007) Cases and Materials in Company law, 8th Ed., Oxford University Press
- Paul Davies (2008) Gower's Modern Company Law, 8th Ed., Sweet and Maxwell
- John Lowry and Adam Dignam (2006) Company Law, Oxford University Press ISBN-13: 978-0-19-928936-3
External links
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Wikipedia content modification information:
- This page was last modified on 25 October 2008, at 10:15.
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