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Company Law
Company Law
A company A partnership
“person” – a subject of rights and duties & therefore, includes ‘artificial person’
Debts & obligations incurred in the course of the company’s business are those of
the company.
INCORPORATION
It is essential to register
Ashbury Railway Carriage Co. vs. Riche (1875) L.R. 7 H.L. 653.
pp. 667-668
Name:
Situation of the registered office
Objects – main objeccts
Change of objects
Articles of Association
(must not contain anything contrary to the general law of to the provisions
of its Memorandum)
The Directors may appoint one or more of their body to the office of Managing
Director – they may confer upon him any of the powers exercisable by them on
such terms and conditions as they think fit.
When acting on behalf of the company directors are agents of the company.
The powers – they should only exercise for the benefit of the company.
They must not make secret profits from their position as Directors (even though
the acquired the profit in all honesty and good faith)
They should not place themselves in a position where their duty and their personal
interest conflict. Therefore, a contract between a director and his company is
voidable by the company.
Several other prohibitions are also provided under the Companies Act and in the
Articles of Associations
D. COMPANY’S MEETINGS
Types of Meetings
• Must be held at least once in every calendar year in addition to any other
General Meetings held in that year.
Directors Meetings
Regulations affecting the conduct of Board meeting and their powers (and
limitations) are usually set out in their Articles of Association.
Quorum of Meetings
The principle:
At least two members must attend to constitute a quorum.
Refer:
i. Re Salvage Engineers Ltd.
(1962) 28 MLJ 438
The fact:
In 1978, the plaintif company, People’s Insurance Co. (M) Sdn. Bhd.
(PICMSB), was a subsidiary of the first defendants company, People’s
Insurance Co. Ltd. (PICL). On 12 Januari 1978, five directors of PICMSM
held meeting. One of the directors was the Managing Director of the
defendant (PICL), another one was General Manager and Director of the
defendant (PICL), and another one was Executive Director of the detendant
(PICL). During the meeting they passed a resolution that affected PICL.
The defendant (PICL) denied any liability.
Held
(1) The parent (holding) and subsidiary companies are two separate legal
entities;
(2) Officers of the parent company who are on the Board of the subsidiary
are not representatives of the parent company but sit at the Board
Meeting as directors and agent of the subsidiary;
(3) A resolution of the Board of directors of the subsidiary does not bind
the parent company. The resolution did not constitute a contract
between the parties.
Cohen L.J. :
Walton J. :
• Refer to
Companies Act 1965