In company law of Malaysia, a company is treated as a separate legal
entity from its members constituted in it which is its shareholders and
directors. This is the doctrine of separate legal principle.
The company is a different separate body from its member. Thus, the
members of the company are not liable for the company debts. For
instance, when a company turn into a contract, the company itself will
personally be liable for the contract rather than the shareholders and the
directors. Therefore, a company is a corporate body. A corporation is an
artificial legal person that exists independently of the individuals who at
any given time are the members of the corporate body. This principle was
established by the House of Lords in Salomon v Salomon & Co Ltd.
An agency is a relationship where one person consents or is deemed to
have consented that the other person should act on its behalf so as to
affect its relations with third parties.
At the time the company is incorporated, it is a separate legal person, it
brings forth some effect which can be the features of it. Under section
16(5) of the Companies Act 1965 states that, once a company had been
incorporated, the company had all the ability as an incorporated company.
For instances, it is means that the company can enjoys its right and
function as a legal person. Company that incorporated is a legal
personality that is created and recognized by the law as stated by Salleh
Abbas F.J in Tan Lai v Mohamed bin Mahmud.
When a company register under Companies Act, it becomes vested with
corporate personality which is an independent legal person and separate
from its members. For instance, the company is a legal person.
In Salomon v. Salomon & Co. Ltd. (1987), unsecured creditors claimed
that the company never had an existence of independent although it was
incorporated. They claimed that it was Salomon himself trading under
another name, but the House of Lords held Salomon & Co. Ltd. must be
regarded as an independent person from Salomon. This is because of the
fact that the company was not role as an agent for the member. Thus,
Salomon and the others are mere subscribers of the company although he
owned all the issued shares. Hence, Salomon could enforce its rights
against the company as a secured creditor.
Furthermore, the company also has the ability to sue and be sued in its
own name. Therefore, a company can make legal action to enforce its
right. It was established in the case Foss v Harbottle where action brought
by the members of the company made an injury complain towards the
company and it was failing. Therefore, the member could not take action
on behalf of the company.
Besides, a company has perpetual succession which means members may
join and leave, but the company will continue go on. When a company
become incorporation, it will continue operate until it is dissolved
entity from its members constituted in it which is its shareholders and
directors. This is the doctrine of separate legal principle.
The company is a different separate body from its member. Thus, the
members of the company are not liable for the company debts. For
instance, when a company turn into a contract, the company itself will
personally be liable for the contract rather than the shareholders and the
directors. Therefore, a company is a corporate body. A corporation is an
artificial legal person that exists independently of the individuals who at
any given time are the members of the corporate body. This principle was
established by the House of Lords in Salomon v Salomon & Co Ltd.
An agency is a relationship where one person consents or is deemed to
have consented that the other person should act on its behalf so as to
affect its relations with third parties.
At the time the company is incorporated, it is a separate legal person, it
brings forth some effect which can be the features of it. Under section
16(5) of the Companies Act 1965 states that, once a company had been
incorporated, the company had all the ability as an incorporated company.
For instances, it is means that the company can enjoys its right and
function as a legal person. Company that incorporated is a legal
personality that is created and recognized by the law as stated by Salleh
Abbas F.J in Tan Lai v Mohamed bin Mahmud.
When a company register under Companies Act, it becomes vested with
corporate personality which is an independent legal person and separate
from its members. For instance, the company is a legal person.
In Salomon v. Salomon & Co. Ltd. (1987), unsecured creditors claimed
that the company never had an existence of independent although it was
incorporated. They claimed that it was Salomon himself trading under
another name, but the House of Lords held Salomon & Co. Ltd. must be
regarded as an independent person from Salomon. This is because of the
fact that the company was not role as an agent for the member. Thus,
Salomon and the others are mere subscribers of the company although he
owned all the issued shares. Hence, Salomon could enforce its rights
against the company as a secured creditor.
Furthermore, the company also has the ability to sue and be sued in its
own name. Therefore, a company can make legal action to enforce its
right. It was established in the case Foss v Harbottle where action brought
by the members of the company made an injury complain towards the
company and it was failing. Therefore, the member could not take action
on behalf of the company.
Besides, a company has perpetual succession which means members may
join and leave, but the company will continue go on. When a company
become incorporation, it will continue operate until it is dissolved
