tutorial 7

KOLEJ PROFESSIONAL MARA AYER MOLEK

COMPANY LAW (LAW2513)

TUTORIAL 7 – SEPARATE LEGAL ENTITY AND THE NATURE OF LIMITED LIABILITY

SECTION A

1.       What is the legal principle that was established  in the case of Foss v Harbottle ?

A.      the company has the power to hold land

B.       the company is still exist if all the members and the controllers are dead

C.       the members of the company cannot take action on behalf of the company

D.       the company can sue and be sued in its own name

2.     Which of the following statements is best described as regard to the company’s ability to own property?

A.                The property of the company is also the property of the members

B.                The company can own property under its own name

C.                The person who owns all the shares in the company has a legal or equitable interest of the property

D.               The members also have an interest in the company’s property that can be insured

3.       When a company is duly incorporated and comes into existence, the effects are:

          I.       An artificial person is born out of the process of law

          II.      The company’s assets belong to the members collectively

          III.     The company can use its own name to enter into transactions

          IV.      Change among the shareholders would require the transfer of the company’s assets

          A.       I & II

          B.       II & III

          C.       I & III

          D.       II & IV

4.       The liability of a member of a company limited by shares will depend on _________.

     A.       whether his shares are fully paid or not

     B.       whether his shares are transferable or not

     C.       whether he is the promoter of the company or not

     D.       whether he is one of the company’s board of director or not

5.       The case of Re Noel Tedman Holdings Pty Ltd [1967] Qd R 561 illustrates the best one of the effects of transaction that __________.

A.            even if the membership changes, the company does not comes to an end

B.            the company can sue and be sued in its own name

C.            the company is a legal person created by the law

D.           the property of the company is its own, and not that of its members

SECTION B (20 MARKS)

Answer any one (1) question only from this section

Question 1

(a)      Explain the following “rules for determining partnership”:

i)             Joint tenancy and tenancy in common                                    [5 marks]

ii)            Sharing of gross returns                                                       [5 marks]

iii)           Receipt of shares of profits                                                  [5 marks]

(b)     Explain the “accountability of partners for private profit” under section 31 of Partnership Act 1961. Support your answer with relevant case.        [5 marks]

Question 2

Explain the following effects of incorporation:

(a)      A body corporate                                                                         [5 marks]

(b)     Ability to sue and be sued                                                             [5 marks]

(c)      Perpetual succession                                                                    [5 marks]

(d)      Power to own property                                                                 [5 marks]