c)Enemy CharacterA company may be regarded as an enemy if, inter alia, all or substantially all of its shares areheld by alien enemies. This is illustrated by Daimler Co Ltd v ContinentalTyre & Rubber Co(Great Britain) Ltd. Since there appears to be no Kenya case on the point, the principlessummarised by Lord Parker may be useful guidance to a Kenyan who might have to determine,in a given case, whether a particular company is to be regarded as a friend or enemy of Kenya.S T U D Y T E X Td)Ratification of Corporate ActsA number of English cases which are regarded as instances of lifting the veil are those relating toinformal ratification by the members of acts done on behalf of the company. In each of thesecases the court regarded a decision of the members as the decision of the company itself andthereby lifted the veil of incorporation. e)Group EnterprisesBe
Numerous cases have been decided by English courts the general tenor of which is to regard asubsidiary and its holding company as one entity. There is no basic principle governing thelifting of the veil in these instances and each decision was based on the facts of the particularcase. Examples are Harold Holds worth & Co Ltd v Caddies, Hellenic and General TrustLtdand DHN Food Distributors v LondonBorough of Tower Hamlets.f)Determination of ResidenceLike an individual, a company has a residence where it carries on business and keeps on house.To ascertain a company’s residence entails lifting the veil of incorporation. This is because acompany resides in the country in which its affairs are controlled and managed from. In DeBeersConsolidated Mines td. V Howe, the court was emphatic that a company’s residence is thecountry in which its central management and control actually abides.REGISTRATION OF A COMPANYAdvantages of incorporation1. Limited LiabilityThe liability of all the members of a limited company is limited to the nominal amount of theirshares therein.2. Transferability of SharesShares in a company can be transferred (subject to any restrictions in the Articles ofAssociation) from one person to another without the consent of the other members.3. Separate Legal EntityA company as is already illustrated both by the Act and case law, has separate legal entity fromits members and its existence is not affected by the death, insanity or bankruptcy of a memberi.e. a company has perpetual; succession. Members will always come and go but the companywill continue to exist.4. ControlThe control of a company can be secured by the acquisition of the majority of the company’sshares which carry the voting power.5. Permanent ExistenceThe life of the company is permanent. The Company Act creates the company and can dissolveit. The death, insolvency or the transfer of shares of members does not affect the existence ofthe company. It may be stated that, “members may come, members may go; but the companygoes on forever”.6. Separation of Ownership and ManagementBe
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