Legal aid oyo journal of legal issues vol. 1, Issue 1, 2017
LEGAL AID OYO JOURNAL OF LEGAL ISSUES VOL. 1, ISSUE 1, 2017
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Company Law Notbeook
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- (c) Perpetual succession
- Transferability of shares
- Section 82 Companies Act (2006)
- (e) Property
- Short v Treasury Commissioners (1948) 1 KB 116 122
| LEGAL AID OYO JOURNAL OF LEGAL ISSUES VOL. 1, ISSUE 1, 2017. 106 (b) Limited liability It follows from the fact that above that if a corporation is a separate person, then its members are not liable for its debts. Consequently, in the absence of express provisions to the contrary, the members will be completely free of any liability. 448 It should be noted that limited liability applies only to members. A company does not enjoy limited liability in its dealings with outsiders. (c) Perpetual succession One of the obvious advantages of an artificial person is that it is not susceptible to "the thousand natural shocks that flesh is heir to". It cannot become incapacitated by illness, mental or physical, and it has not (or need not have) an allotted span of life. This is not to say that the death or incapacity of its human members may not cause the company considerable embarrassment obviously it will if all the directors die or are imprisoned, or if there are too few surviving members to hold a valid meeting, or if the bulk of the members or directors become enemy aliens. 449450 (d) Transferability of shares Incorporation, with the resulting separation of the business (owned by the company) from the shares (owned by its members, greatly facilitates the transfer of members interests. 451 Indeed, it is one of the objects upon which a company is found - that shares should be capable of easy transfer. This notion is well expressed in Section 82 Companies Act (2006) where it provides that “the shares or other interest of any member shall be movable property, transferable in the manner provided by the articles of the company.” This ability to transfer shares, enables the company to continue functioning as a going concern as ownership of shares held by a member who no longer desires to be one can be easily transferred to another individual who wishes to be thus reinforcing the company‟s perpetual existence. (e) Property Another consequence of incorporation is the ability of a company to own property separate and distinct from that of its members. The property of a company is vested in it as a corporate body and held in its own name and no member, not even all the members, can claim ownership of any asset of company‟s assetsas they only own shares in the company. This position is well elucidated in Short v Treasury Commissioners (1948) 1 KB 116 122where Evershed LJ opined that "Shareholders are not, in the eyes of the law, part owners of the undertaking. The undertaking is something different from the totality of the shareholding" 448 ibid Gower, p. 39 Daimler Co Ltd. v. Continental Tyre and Rubber Co. ibid Gower p. 44 ibid Gower, P. 46 |