Company Law (overview od development of company law in cwc Caribbean)
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THE SALOMON PRINCIPLE OF WHAT RELEVANCE
| Company Law (overview od development of company law in cwc Caribbean) Company law What is the content of modern Caribbean company law What is the nature of the relationship and it’s derivatives What are the sources of modern Caribbean company law Texts Burgess of company law Burgess and gower modern company law Brenda hanegan company law Artificial being created by statute it gains its person as a consequence of the statute that creates it Two examinable areas Formation of company Corporation personality Liability of promoters – what is meant by patchwork contracts? 3rd examinable area what is the company likely to do (corporate capacity) –less examinable ultra vires confined to statutory corporations relationship between company and corporate investors/ shareholders director’s duties and the duties of the company’s secretary ( examinable) fictitious entity – entity which is given life only by virtue of statute- outside the context of the company’s at, the company will not exist- it is not a real person- it is deemed to be a real person by company’s act – only a jurisprudential person in cwc the first statute were all enacted – no state received company’s legislation because at the time the company’s act were being passed in the UK ( company law began developing) all cwc states were either settles or conquered or ceded territories of England thus there could be no question of reception of English company statutes the result is that each state in the caribbean had to legislate adopting the provisions of one or the other of several company’s acts of England; Trinidad 1845 and last statute is 1931 english company’s act Barbados passed act in 1982- base of law because they follow the Canadian interpretation But beginning in 1990 and ending in 1995, all cwc states went to harmonize their laws 3 hours out of 6 johnsjeremie8@gmail.com corporate personalities trace law to early beginnings-law developed due to undeveloped coordination of company law in cwc- no two territories had the same company law regime-patch work of legislation- territories in cwc didn’t stick to one statute – efforts of harmonization (bringing law moderately interline) began roughly around demise of federation efforts of harmonization reached in 1990’s when Yusis the Cbean law institute project and around time Trinidad 1995 statute established- first modern enactment came out of the efforts which forgoe the demise of federation 1982 barbados act Purpose: to have universal trading rules Harmoinization not intended nor did it achiecved uniformity Intention: harmonization would result in law which were broadly similar through out the region Broadly because of eg. Jamaica Jamaican statute contains marked distinctions from those which exist in the other territories Contemporary/ Modern CWC Company Law First registered company were provided for by 5 critical pieces of English legislation But even before, those enactments were legislated the company as a jurisprudential creation was in fact known to English law So that the earliest companies were special purpose vehicles ( SPV) formed for one purpose or the other eg. the east india trading company- west indian trading company (SPV’s formed for one purpose) Purpose of those two SPV’s was to simply relieve the state of the burden of enhancing doubtful expedition to what was then the New World English developed companies for funding explorations initially away from the state from what we know today as the private sector Did this by creating SPV’s Were companies but were not registered companies- their use was limited for a specific purpose and to the individuals that the relevant charters to explore in case of east indian- west indian The first registered companies are those which were created pursuant to 5 pieces of English legislation These pieces were 1. Joint Stock Companies Act 1844( statute of victoria) 2.read with JSCA 1886 ( statute of victoria) 3. companies Act 1862 25 26 4.companies consolidation act 1908 ( statute of Edward the 8th) 5.1948 companies act ( Statute of George , 11 and 12) Form bedrock of modern company law – not exhausted 1855 limited liability act – 18 and 19 of victoria for example expressly provided for limited liability for shareholders All have to be read together but no single act in CWC the same Patchwork-attempts of harmonization-largely accepted Company law a creature of statute even though case law is important and has developed as a guide for legislative provisions Iron rule- The company as a jurisprudential fixture can only exist by virtue of statute Statue themselves are a function of societal needs that are easy to understand as was the East Indian and West Indian Trading Statute- functions as societal need to take financial responsibility away from state SO to harmonization was for societal need for the interest of trade in CWC- legislation must be broadly similar in all territories Shape of early Company shows definition of what is the shape of Modern companies The early registered companies were created by a process of incorporation which is not dissimilar of which is employed today Once registered, the early companies gained a separate legal personality meaning it ceased to associated with the real persons who actually incoroporated the company Two principal organs were to be found in the early companies- shareholders usually acted in general meetings ( who funded the company- capital) comprised one owner Board of Directors who managed the company on behalf of shareholders who as a power seleceted them Shareholders by a stake in fortune of the company- sometimes in profit is rewarded and vice verca What is a company? Section 4 Companies Act – exhausted list of what is a company “Means”- when something “means” something it is a exhausted list) Definition is referential It defines company by referring to something- “body corporate “ “Incorporated”- followed descriptions in the Act “Continued”- act does not simply take place- legislated in a vacuum non-exhaustive example: body corporate includes a company within the meaning of this section ..”or other body corporate wherever or however incorporated other than corporation Definition of body corporate non exhaustive ( wider than definition of company because it is not exhausted and 2. There is that phrase which includes the meaning of company and the word “or” ( or other body corpprate) Definiation of company exhaustive Under s 4 body corporate must be continued under this Act Body corp included bodies of that type OR however/wherever incorporated Eg, by statute, by special statute, by body of corporation- made by professor Burgess pg 18 What is a company by distinguishing what it is not a company Company confers what is known in law as what is limited liability on its promoters/ shareholders Company has a separate legal personality- distinct from promoters/shareholders Separate Legal personality doctrine established in Soloman v soloman 1897 Prospered a long time to such an extent- sort out succession- thought of a means of bringing family into business- ensure family will benefit from good fortune he enjoyed as a sole trader Decided to turn sole trading business into a limited liability company in obedience to the company’s acts he followed all of the formalities which were prescribed by statute- described what was then described as a memorandum of association- he fixed the nominal capital of his business- what he though business was worth ( 40,000 pounds) Divided nominal capital into 40,000 shares- I pound each Solomon would be director together with two eldest sons- two entities in exhistance; Me solomon’s sole trading business Company being formed Mr Solomon as Sole proprietor and clothed by virtues of separate legal identity due to act- sale and paid to Mr S and pays to company in exchange for fully paid up shares The paid of 10,000 shares is paid mr soloman sole trader to mr Solomon as a company by virtue of debentures As soon as the business becomes a company and Solomon as a company scrambles to make funds –sells debentures to 3rd party- puts tht money into company- and company unable to pay that amount which is sold to third party0 i.e. unable to honor IOUS of debentures 3rd party sues and alleges that all of this ( sale of Mr S as ST to Mr S as a corp is a sham) Judge Williams held purchaser is entitle by an order where mr S will stand in the shoes of the company ad thereby be obligated to pay all the amounts that are due and owing on the debenture in essence, the trial judge refuses to think mr S as a separate legal entity Lord Mcnorton? reverses decision and say only mr S and his family was involved in the party is irrelevant Compliance with the registration formalities by any persons whether they are related or not would give rise to a new and separate entity which was represented by the company and as a consequence of that mr S could not be asked to be liable for the debts of the company which in law was a separate being from him, his debt were not those of the company and vice verca AG v Antigua Times- whether company can enjoy fundamental right provisions in the Antigua constitution-] Decision of Lord Frazer – read decision of HOL in Macaura v northern insurance constitution ins cro v kosmopolous where taxation staute is involved the veil is lifted gwap gwap u Download 154.95 Kb. 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