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A private limited company can be formed with just one director and one shareholder
Shareholders pay for their shares and are entitled to profits (dividends) but have no entitlement to company’s property
Directors have day to day control under MA 3
Façade or sham- clarified as evasion principle under petrodel
Single economic entity (now held parent companies are not liable for their subsidiaries other than specific statutory circumstances) NOT RELEVANT ANYMORE
Agency- where subsidiaries act as agent for parent companies or company acts as agent for shareholder, the parent company or shareholder can be liable on this basis- this is on the basis of common law agency, not piercing the corporate veil. There is no presumption agency has taken place and difficult to establish unless an express agreement. NOT RELEVANT ANYMORE- ONLY UNDER TORT CASES WHICH ARE BELOW
Tort- parent companies can be liable to those dealing with their subsidiaries but this is not lifting the corporate veil- VTB Capital plc v Nutritek International Corp and others
Taxation- group structures need to be treated differently for disclosure and fincial reporting purposes aas in S399 CA 2006- requires parent company to produce group accounts. S409 requires parent company to provide details of the names of subsidiary and shares they hold in them
Concealment principle under petrodel- Employment- Employment Rights Act 1996 protects employees statutory rights when transferred from one company to another within a group
Concealment principle under petrodel- Corporate Insolvency- S123-215 Insolvency Act 1986- offences of fraudulent trading and wrongful trading where those involved in a company may in certain circumstances be liable to contribute to debts of an insolvent company