The R v P&O Ferries (Dover) Ltd. case demonstrated that a corporation could be indicted for manslaughter if it, through the controlling mind of one of its agents, commits an act fulfilling the prerequisites of the crime of manslaughter.
The procedure for bringing or continuing a derivative claim is set out in sections 239 and 240 of the Act, and the interlocutory orders that the court may make in the proceedings are detailed in Part XI of the Act.
The transaction is voidable at the instance of the company, and it may give rise to a cause of action for appropriate relief in favor of either the company or any third party prejudicially affected by the act.
A holding company cannot be held liable for torts committed by its subsidiary or be called upon to account for its criminal conduct unless the circumstances of a particular case dictate that the corporate entity of the parent company be disregarded and its corporate veil lifted.
No, the capacity of a company to create legally binding relations cannot be eroded by any provision in its constitution.
In principle, a company may not be convicted of a criminal offence committed by a junior officer who is not its directing mind and will, especially if the company shows it had exercised all due diligence to avoid committing the offence.
'Limited liability' is construed as 'limited liability in contract,' meaning limited liability to creditors who have contractual claims on the company.
A 'derivative claim' refers to proceedings by a member of a company in respect of a cause of action vested in the company and seeking relief on behalf of the company.
No cause of action arises if the company affirms and adopts the transaction as its own or if an order for restitution of any money or other asset involved in the transaction is made.
A company can be held vicariously liable in tort for loss or damage suffered by third parties due to wrongful acts or omissions of its servants or agents in the ordinary course of their employment and within the scope of their authority.
Yes, it is immaterial whether the cause of action arose before or after the person seeking to bring or continue the claim became a member of the company.
Mwera J described a derivative suit as an action in company law where minority shareholders, feeling that wrongs have been done to the company which cannot be rectified by internal company mechanisms, come to court as agents of the wronged company to seek relief for the company itself.
The principle expressed in Dadani v Manji and others extends to all rights of action, including the right to defend or enforce recovery of debts. What is owed to a company is not owed to its individual members, and what the company owes, its members do not owe.
The court may grant appropriate relief in favor of the company, including an order for an account of any financial benefits acquired by the director, indemnity for any loss or damage, and restitution of any money or other asset involved in the transaction.
In the absence of illegality, a shareholder cannot bring proceedings in respect of irregularities in the conduct of the company's internal affairs if the majority are entitled to prevent the bringing of an action in relation to such matters.
It is deemed sufficiently authenticated by the signature of a person authorized by the company to act on its behalf.
An incorporated company enjoys legal rights and is subject to legal obligations by virtue of its capacity and legal personality. It can sue and be sued in its name and carry out all its corporate functions and legal acts as a natural person would.
A company can be created by either (a) registration or (b) conversion.
A derivative claim can be brought in respect of a cause of action arising from an actual or proposed act involving negligence, default, breach of duty, or breach of trust by a director or former directors of the company.
Only a juristic person, i.e., an entity endowed with legal personality, can have locus standi before the Court and be the subject of rights and liabilities as declared by the Court.
A juristic person is a body or association other than a natural person, endowed by law with the capacity to have rights and duties apart from its members.
No, a company cannot be charged with a driving offence, which requires the physical act of driving. However, it can be held vicariously liable for loss suffered by a plaintiff due to the negligent act of its driver.
A member of a company can bring an action for the benefit of the company if, due to an illegality, a shareholder perceives that the company is put to loss and damage but cannot bring an action for relief in its own name. This is done by way of a derivative claim.
It is the company, not an individual shareholder, that has the capacity to enforce rights of action vested in the company or sue for wrongs done to it.
A company is distinguished by having legal personality separate from its members, whereas unincorporated associations do not have distinct legal personality and their members' liability for debts is not limited.
No, a company is not obligated by statute to have a common seal for the execution of documents.
The right to bring a derivative action under the Act is not limited to shareholders and may be exercised by someone to whom shares in the company have been transferred or transmitted by operation of law.
No, a member cannot act on behalf of the company by virtue of being a controlling shareholder, except in specific circumstances such as acting in accordance with the company's articles, by virtue of an appointment, or under a contract for services.
Limitation of liability does not protect officers or agents of a company in respect of claims founded on tort or crimes committed in the course of the company's business, even though the company may be held vicariously liable.
Yes, shareholders can bring a derivative claim on behalf of a foreign company, provided that the proceedings accord with the rule in Konamaneni and others v Rolls Royce Industrial Power (India) Ltd and others.
A company can enter into a legally binding contract either in writing under its common seal or by a person acting under its authority, whereas a partner in a partnership can represent the firm and co-partners in the ordinary course and within the scope of the partnership business.
Corporate personality refers to the legal status and recognition of a company as a separate legal entity or corporate personality, endowed with rights and obligations, and enforceable at law.
No, a member cannot bring an action to enforce a legal obligation under a transaction previously entered into by the company.
Creditors of a body corporate cannot lay claims on any of the assets held by individual shareholders in their own name. Such claims are limited to assets held by or on behalf of the company saddled with the contractual obligations owed to its creditors.
A derivative claim may be brought by a member of the company against a director or former directors of a company, either alone or jointly with other persons, in exercise of a statutory right or in accordance with an order of the Court in proceedings for protection of members against unfair prejudice.
Incorporation is defined as a merging together to form a single whole, conferring legal personality upon an association of individuals or the holder of a certain office, pursuant to a Royal Charter or an Act of Parliament.
'Mens rea' is a Latin phrase meaning 'guilty mind' or 'criminal intention'. It is the state of mind that the prosecution must prove a defendant had at the time of committing a crime to sustain a conviction. In corporate criminal liability, mens rea must be attributed to the company through its directing mind and will.
It implies that a person dealing with the company in good faith is not bound to inquire about any limitation on the powers of the directors, whether contained in the memorandum or articles of association, a resolution of the company, or any agreement between the members of the company.
Section 42(2) of the Act allows such companies to have an official seal for use outside Kenya, which must be an exact copy of the company's common seal with the addition of the place or places where it is to be used.
It becomes a legal entity with the capacity to enter into contracts and create rights and obligations enforceable at law.
No, the power of directors to bind a company or to authorize others to do so cannot be limited by any purported restriction contained in the company's constitution.
Juristic persons include undertakings and corporations recognized as separate legal entities or corporate personalities by virtue of their formal registration in accordance with the Companies Act or other statute law.
A company can authorize someone in writing, either generally or in respect of specific matters, to execute or authenticate deeds or other documents on its behalf.
An official seal has the same effect as the common seal of the company.
A document executed or authenticated by a duly constituted attorney of a company has the same effect as if it were executed or authenticated by the company itself.
It is critical to the validity of its transactions because the company has no mind or hands of its own and must act through its directors, designated agents, or other persons appointed in writing for that purpose.
Section 33 of the Companies Act, 2015 states that a company is strictly bound by, and cannot avoid liability for, its acts or omissions notwithstanding any attempt to limit its capacity by a provision in its constitution.
