Company law LLB
1. TASK
You will need to submit a written assignment considering the following:
Part A
"The doctrine laid down in Salomon v Salomon & Co. Ltd [1897] AC 22 has to be watched very carefully. It has often been supposed to cast a veil over the personality of a limited company through which the courts cannot see. But that is not true. The courts can and often do draw aside the veil. They can and often do, pull off the mask. They look to see what really lies behind." Lord Denning MR in Littlewoods Mail Order Stores Ltd v Inland Revenue Commissioners [1969] 3 All ER 442 (Court of Appeal).
Critically discuss this statement and consider the extent to which it is still true, or has ever been true. Reference should be made in particular to case law and to journal commentary.
Part A is worth 50% of the overall marks for this assignment.
Part B
Your longstanding clients, Julie and Jeremy, have come to you for advice about Julie Enterprises Limited [`JEL], in which they each hold 35% of the shares and are the two directors. JEL also has 3 other shareholders who hold 10% each; Vicky Bradley and Lizzie.
JEL is a company which runs surfing holidays in Cornwall. It was set up two years by Julie and Jeremy. Vicky, Bradley and Lizzie were friends who invested £1 0,000 each and wanted to benefit from the great idea. JEL has adopted the Model Articles for a private limited company with the following amendments;
1) Disputes between the company and the members shall be referred to arbitration.
2) Julie and Jeremy shall be the directors for life.
3) Any member who wishes to transfer their shares shall offer them to the directors who will take them at a fair price determined by an
independent accountant.
4) Lizzie's other company, Surf'n'Turf shall provide all the catering facilities at JEL's waterside premises.
The cause of your client's concern arises because of the following events;
A] Julie and Jeremy have complained to Lizzie that Surf'n'Turf are too expensive and are driving the surfing community away to different outlets. They have therefore signed a new exclusive catering contract with `Cheap as Chips'. Lizzie is threatening to take action for breach of the Articles.
B] Bradley also has a company, 'Malibu Monsters Ltd' which makes surf boards. Although JEL use Malibu Monsters, Bradley has also been supplying these boards to competitors and has refused requests by Julie and Jeremy to stop doing this. In response, Julie and Jeremy have called an Extraordinary General Meeting [EGM] to propose the following additional Article; 'Any member must transfer his or her shares to the directors' nominee upon a request in writing by the holders of 75% of the issued shares'.
C] Vicky has expressed herself to be very upset by the breakdown in these relationships so has offered her shares to Julie and Jeremy, but they have declined as they cannot currently afford to buy them back due to lower than expected dividends caused by a temporary
drop in JEL's profits. In any case they want to keep Vicky on board so that she does not side with Lizzie and Bradley to block any special resolutions.
Advise Julie and Jeremy on;
I] The legal implications of these events;
II] What other recommendations you might have regarding amendments to JEL's constitution.
III] How further finances might be raised for JEL;
Part B is worth 50% of the overall marks for this assignment.
This assignment represents 100% of the total marks for Company Law 1.
WORD COUNT
The total word count for this assignment is 3000 words; the bibliography and footnotes are excluded. Significant amounts of text should not appear in the footnotes. No work exceeding the word count will be marked. You must declare the word count.
5. CONCESSIONS
- It is your responsibility to apply for a concession if you have an appropriate reason for not being able to submit on the due date.
- You must apply before the submission date on a form available from the faculty office.
- You must provide independent documentary evidence. Please note that concessions can only be granted on grounds such as serious
personal circumstances and illness. If you do not have independent documentary evidence, you should consult Student Services who may be able to recommend a concession for you.
- Concessions are available only from the Programme Leader or the Head of Law, so take the form and evidence to them.
- Concessions can only be given for and during the period set out in the current concessions policy and in accordance with that policy.