COMPANY LAW PQ SUMMARY:
PQ Tips:
Analyse and apply facts carefully - why are u being told certain things?
o Hinting at the relationships between parties
o PQs will be long, this is done to nudge u as to the relationships and make u
write the right things
o Usually a side long
o If give 3 things to give rise to a conclusion draw on all of these when
applying them
Deal w relevant foundational points before analysis - easy points to pick up
o Fully address all parts of the relevant test e.g. s.172
o Use statute book
o Success + have regard - statute 2 elements
o Pay attention to lecture headings e.g. define comp success good faith have
regard inexhaustive list - 6 elements
Identify all missing facts but don’t make up/assume
o Just flag it
Think abt structure to avoid repetition and enhance clarity
o Don’t refer to diff answer out of the 3
o But within the same answer duty applies to both Ds use it once elements -
see above and then apply the different facts but don’t waste time setting
out details of duty again
o if D is in breach and 172 comes in answer how do u weigh them? Deal w
what u think is the primary breach first in detail bc if time runs out want
effort focussed here. Then deal w/ 172, use all elements but probs more
brief relative to Qs clearly 172 fact pattern.
COMPANY REQUIREMENTS:
minimum capital requirement
o Plc (£50K) (s.763); Power to alter, increase to 50K OR re-register as ltd
(s.764)
o Ltd no requirement
LL in constitution s.3(1)
o 3(2) - shares, share capital (starting £ strength), proportion of OG
subscribers
o 3(3) - guarantee, amt members promise to contribute in wind up e.g.
charities
Ltd + plc
s.4
o 4(1) Priv - any Co that ≠ plcs
o 4(2) Plc - share or guarantee + has share capital
4(2)(a) plc on certificate
4(2)(b) complies w/ CA
Name: needs 'plc' (58(1)-(2)) 'Ltd' or 'limited' 59(1)-(3)
registration requirements (Ss.7-13)
Required documents
Memorandum of Association s.8(1)
Registration of Co s.9(1)
, Registration application requirements 9(2)
o (a) name
o (b) office E, W, S or NI
o (c) LL, share or guarantee
o (d) ltd or plc
o (e) lawful purposes (ECTA 2023)
Statement of capital (s.9(4)) + initial shareholding (10(2))
Officer (s.9(4)(c)) + requirement of statement (12(1)
Statement of compliance to registrar (S.13)
Similar names search (S.53-81)
Sanction failure to comply (S.83)
Economic Crime Transparency Act 2023 (ECTA) - money laundering
o Statement of lawful purpose
o Subscribers: ID verified ≠ disqualified
o Failure = crime
o duty to deliver verification statement to registrar + ensure
office/email (9(5)(a)
Certificate issued (15 - 'shall' ≠ discretion bring proceedings to compel,
requirements (2)-(3), (4) conclusive evidence CA compliance) + docs
registered (14) once CA satisfied
Body corporate from date on certificate - S.16(2)
NATURE OF THE COMPANY: (2-4)
Is there a sham/façade? Adams v Cape evade legal limits or pre-existing duty
Steal £ from Co A to Co B (Trustor v Smallbone)
Fraudulently sell overvalued asset (Darby ex. P Brougham)
Evade restrictive covenant non-compete, hold strings unofficial D
(Gilford Motor Co v Horne)
Evade specific performance (Jones v Lipman)
Is this concealment or evasion? Prest v Petrodel, concealment (lift who set
up and why Trustor) evasion (pierce last resort not if other remedy available
Jones, Gilford)
Evasion - hide asset from bankruptcy (Wood v Baker) or criminal
confiscation order (R v Sale)
Is there a statutory provision? S.213 IA 1986 (fraudulent trading), s.214 IA
(wrongful trading)
Is there AoR? Go beyond ordinary business form special relationship
(Williams v Natural Life Health Foods)
Is this an agency situation?
Lift: no own existence cant regard hold expensive asset (F.G. (Films)),
factual control absorbed operations (Millam)
Don’t lift: legit sub ≠ tax parent on sub profit (Gramophone and
Typewriter Co v Stanley) premature speculation restructuring ≠ done
deal (Ord v Belhaven Pubs) knowingly deal with limited co (Persad v
Singh) or limited purpose (Re Polly Peck International)
, Wider agency: contract 'group of Cos as whole' force work for sub
(Harold Holdsworth v Caddies) or wartime policy enemy 'mind and
will' (Daimler Co v Continental Tyre)
Does parent owe tortious DOC to sub's employees? Chandler, Okpabi,
Vadenta
Did parent induce breach of contract? Express agreement fix DOC tight £
control (Stocznia Gdanska) fact dependent not if no agreement ( Palmer
Birch v Lloyd )
Is there an alternative remedy? Prest - pierce only if no remedy available
Is this a state owned company? Kensington (liable if controlled) v La
Generale (not liable id independent)
CORPORATE ATTRIBUTION: (5-6)
Whether (individual action) binds the comp
Did A have actual authority? Express + implied (Hely-Hutchinson, repeatedly ratify
transaction)
If not, did A have apparent authority? Freeman & lockyer 4 elements burden on
3rd party
o representation (on dealing w Co not individual not appearance verify link
Rama; authority to communicate First Energy; context 3rd party knows
conflict need UK approval not bound Hudson Bray v Umbro
o from someone with actual authority (trace organ exec)
o reasonably relied on (commercially acceptable not wilful blind to red flag
interest conflict transaction size Hopkins v TL; enquire not beneficial
prejudice sell only major asset irregular BoD minutes East India Co;
reasonableness Q of fact fully investigate Criterion Properties v Stratford)
o constitutional transaction
Was contract pre-incorporation? Promoter liable s.51, Co later formed CANT adopt
via unilateral ratification (Re Northumberland Ave Hotel Co) COULD via formal
BoD/GM v hard (Natal Land v Pauline) if vary/new contract 3rd party accepts new
payment terms (Howard v Patent Ivory), liable even if Co never formed
(Phonogram Ltd v Lane) only disapply if clear express exclusion of personal liability
(Phonogram)
Is the transaction beyond Co capacity? Cant challenge using constitution s.39
unrestricted objects unless articles specify otherwise or didn’t alter to remove pre-
existing objects clause - apply UV cases s.31
Objects limit capacity beyond UV (Ashbury Ry Carriage v Riche) implied
power incidental power to objects (A.G. v G.E.) incidental uncertain list all
possibilities (Cotman) in objects but not Co BI (Re Introductions) cant take
objects v narrow to v wide rigid interpret (expensive guarantee not BI
Rolled Steel)
Does transaction benefit from s.40? D good faith power to bind Co not limited by
constitution s.40
'person dealing w Co': not individual shareholder (EIC Services), can be D if
valid GM (Smith v Henniker-Major)
'good faith': genuine, honest not reasonable (Barclays Bank v TOSG),
burden shift to 3rd party enquire properly authorised where unusual
undisclosed conflict (Wrexham FC v Crucial Move), articles constructive
PQ Tips:
Analyse and apply facts carefully - why are u being told certain things?
o Hinting at the relationships between parties
o PQs will be long, this is done to nudge u as to the relationships and make u
write the right things
o Usually a side long
o If give 3 things to give rise to a conclusion draw on all of these when
applying them
Deal w relevant foundational points before analysis - easy points to pick up
o Fully address all parts of the relevant test e.g. s.172
o Use statute book
o Success + have regard - statute 2 elements
o Pay attention to lecture headings e.g. define comp success good faith have
regard inexhaustive list - 6 elements
Identify all missing facts but don’t make up/assume
o Just flag it
Think abt structure to avoid repetition and enhance clarity
o Don’t refer to diff answer out of the 3
o But within the same answer duty applies to both Ds use it once elements -
see above and then apply the different facts but don’t waste time setting
out details of duty again
o if D is in breach and 172 comes in answer how do u weigh them? Deal w
what u think is the primary breach first in detail bc if time runs out want
effort focussed here. Then deal w/ 172, use all elements but probs more
brief relative to Qs clearly 172 fact pattern.
COMPANY REQUIREMENTS:
minimum capital requirement
o Plc (£50K) (s.763); Power to alter, increase to 50K OR re-register as ltd
(s.764)
o Ltd no requirement
LL in constitution s.3(1)
o 3(2) - shares, share capital (starting £ strength), proportion of OG
subscribers
o 3(3) - guarantee, amt members promise to contribute in wind up e.g.
charities
Ltd + plc
s.4
o 4(1) Priv - any Co that ≠ plcs
o 4(2) Plc - share or guarantee + has share capital
4(2)(a) plc on certificate
4(2)(b) complies w/ CA
Name: needs 'plc' (58(1)-(2)) 'Ltd' or 'limited' 59(1)-(3)
registration requirements (Ss.7-13)
Required documents
Memorandum of Association s.8(1)
Registration of Co s.9(1)
, Registration application requirements 9(2)
o (a) name
o (b) office E, W, S or NI
o (c) LL, share or guarantee
o (d) ltd or plc
o (e) lawful purposes (ECTA 2023)
Statement of capital (s.9(4)) + initial shareholding (10(2))
Officer (s.9(4)(c)) + requirement of statement (12(1)
Statement of compliance to registrar (S.13)
Similar names search (S.53-81)
Sanction failure to comply (S.83)
Economic Crime Transparency Act 2023 (ECTA) - money laundering
o Statement of lawful purpose
o Subscribers: ID verified ≠ disqualified
o Failure = crime
o duty to deliver verification statement to registrar + ensure
office/email (9(5)(a)
Certificate issued (15 - 'shall' ≠ discretion bring proceedings to compel,
requirements (2)-(3), (4) conclusive evidence CA compliance) + docs
registered (14) once CA satisfied
Body corporate from date on certificate - S.16(2)
NATURE OF THE COMPANY: (2-4)
Is there a sham/façade? Adams v Cape evade legal limits or pre-existing duty
Steal £ from Co A to Co B (Trustor v Smallbone)
Fraudulently sell overvalued asset (Darby ex. P Brougham)
Evade restrictive covenant non-compete, hold strings unofficial D
(Gilford Motor Co v Horne)
Evade specific performance (Jones v Lipman)
Is this concealment or evasion? Prest v Petrodel, concealment (lift who set
up and why Trustor) evasion (pierce last resort not if other remedy available
Jones, Gilford)
Evasion - hide asset from bankruptcy (Wood v Baker) or criminal
confiscation order (R v Sale)
Is there a statutory provision? S.213 IA 1986 (fraudulent trading), s.214 IA
(wrongful trading)
Is there AoR? Go beyond ordinary business form special relationship
(Williams v Natural Life Health Foods)
Is this an agency situation?
Lift: no own existence cant regard hold expensive asset (F.G. (Films)),
factual control absorbed operations (Millam)
Don’t lift: legit sub ≠ tax parent on sub profit (Gramophone and
Typewriter Co v Stanley) premature speculation restructuring ≠ done
deal (Ord v Belhaven Pubs) knowingly deal with limited co (Persad v
Singh) or limited purpose (Re Polly Peck International)
, Wider agency: contract 'group of Cos as whole' force work for sub
(Harold Holdsworth v Caddies) or wartime policy enemy 'mind and
will' (Daimler Co v Continental Tyre)
Does parent owe tortious DOC to sub's employees? Chandler, Okpabi,
Vadenta
Did parent induce breach of contract? Express agreement fix DOC tight £
control (Stocznia Gdanska) fact dependent not if no agreement ( Palmer
Birch v Lloyd )
Is there an alternative remedy? Prest - pierce only if no remedy available
Is this a state owned company? Kensington (liable if controlled) v La
Generale (not liable id independent)
CORPORATE ATTRIBUTION: (5-6)
Whether (individual action) binds the comp
Did A have actual authority? Express + implied (Hely-Hutchinson, repeatedly ratify
transaction)
If not, did A have apparent authority? Freeman & lockyer 4 elements burden on
3rd party
o representation (on dealing w Co not individual not appearance verify link
Rama; authority to communicate First Energy; context 3rd party knows
conflict need UK approval not bound Hudson Bray v Umbro
o from someone with actual authority (trace organ exec)
o reasonably relied on (commercially acceptable not wilful blind to red flag
interest conflict transaction size Hopkins v TL; enquire not beneficial
prejudice sell only major asset irregular BoD minutes East India Co;
reasonableness Q of fact fully investigate Criterion Properties v Stratford)
o constitutional transaction
Was contract pre-incorporation? Promoter liable s.51, Co later formed CANT adopt
via unilateral ratification (Re Northumberland Ave Hotel Co) COULD via formal
BoD/GM v hard (Natal Land v Pauline) if vary/new contract 3rd party accepts new
payment terms (Howard v Patent Ivory), liable even if Co never formed
(Phonogram Ltd v Lane) only disapply if clear express exclusion of personal liability
(Phonogram)
Is the transaction beyond Co capacity? Cant challenge using constitution s.39
unrestricted objects unless articles specify otherwise or didn’t alter to remove pre-
existing objects clause - apply UV cases s.31
Objects limit capacity beyond UV (Ashbury Ry Carriage v Riche) implied
power incidental power to objects (A.G. v G.E.) incidental uncertain list all
possibilities (Cotman) in objects but not Co BI (Re Introductions) cant take
objects v narrow to v wide rigid interpret (expensive guarantee not BI
Rolled Steel)
Does transaction benefit from s.40? D good faith power to bind Co not limited by
constitution s.40
'person dealing w Co': not individual shareholder (EIC Services), can be D if
valid GM (Smith v Henniker-Major)
'good faith': genuine, honest not reasonable (Barclays Bank v TOSG),
burden shift to 3rd party enquire properly authorised where unusual
undisclosed conflict (Wrexham FC v Crucial Move), articles constructive
