JUNIQ • CORPORATE LAW

Chapter 2 — Incorporation, Separate Personality and Limited Liability

Learning rule: attempt first. The page gives diagnostic feedback without immediately showing the complete answer. Full teaching answers are kept on a separate page so you can reason independently before checking.

FAQ practice

FAQ 1. What is the company’s legal “birthday”?

FAQ 2. Why must you ask “in what capacity?” a person acted?

FAQ 3. Do shareholders own the company’s assets?

FAQ 4. What is the difference between separate legal personality and limited liability?

FAQ 5. Does control of a subsidiary automatically make the parent liable?

Multiple-choice practice

MCQ 1. What best explains separate legal personality?

Directors own company assets Registration creates a legal person distinct from members and directors A company is only a shareholder contract Controller and company are always one person

MCQ 2. Which case most directly shows a controlling shareholder/director can also be an employee?

Macaura Lee v Lee’s Air Farming Ltd Briggs Qintex

MCQ 3. A shareholder has fully paid shares and the company fails owing $4m. No guarantee or wrongdoing. Best statement?

Shareholder must pay $4m Company owes the debt; member contribution is ordinarily limited under s 516 Directors automatically owe $4m The veil disappears on insolvency

MCQ 4. Stella signs a restraint then incorporates a company to carry out the restrained activity. Closest authority?

Gilford Motor Co Ltd v Horne Lee Macaura Canny Gabriel

IRAC construction practice — Stella Designs and the non-compete

Stella is personally bound by a six-month restraint, incorporates Stella Designs, and uses it to provide designs to a direct competitor during the restraint. Build the reasoning in order.

Issue

Rule / Law

Application

Counterargument

Conclusion

Open separate Chapter 2 teaching answers → Open Chapter 2 interactive crossword →