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Company Law · Unit 1

Incorporation, Prospectus and Securities

Unit 1 of Company Law (syllabus: Module I — the nature and kinds of company; corporate personality and lifting the veil; incorporation and the memorandum and articles; promoters and pre-incorporation contracts; prospectus, misstatement and the liabilities that follow; and the issue and allotment of securities). Below: what the unit covers, the provisions it turns on, and the cases an examiner expects you to name.

What this unit covers

  • When does a company become a person distinct from its members?
  • When will a court lift the corporate veil at common law?
  • When does a statute itself pierce the veil?
  • What duty does a promoter owe the company he is forming?
  • What is the effect of an act outside the objects clause?
  • Does a wide objects clause defeat the ultra vires doctrine?
  • What is an outsider taken to know, and what may he assume?
  • When does the rule in Turquand fail to protect an outsider?
  • When may a company be bound by a person who was never appointed to act for it?
  • What remedies follow a misstatement in a prospectus?
  • How is share capital altered, reduced and returned to members?

Treat that list as a self-test: recite each topic's rule from memory before you open its cases.

Provisions

Leading cases

Full case summaries

Exam questions on this unit

In this paper