The court pierced the corporate veil and bypassed the question of corporate identity for the purposes of taxation.
The court held that both companies were separate entities and that the picketing was therefore unlawful.
Lord Diplock observed that the corporate veil drawn by statute can only be pierced by another statute if it so provides, and any Parliamentary intention to pierce the corporate veil must be expressed in clear and unequivocal language.
The company and each officer in default commit an offence and are liable to a fine not exceeding two hundred thousand shillings. Continued failure attracts an additional fine of twenty thousand shillings for each day the default persists.
The company and its officers are liable for any quantifiable loss or damage suffered by a third party due to the breach, and they may face punitive sanctions.
If a company contravenes section 67(1), the company and each officer in default commit an offence and are liable to a fine not exceeding five hundred thousand shillings.
Agency relationships are common with subsidiary companies, which often engage in business undertakings for and on behalf of their parent companies.
Legal obligations in contract transactions can only be enforced against the parties privy to the contract, typically the principal, and not the agent.
Failure to comply attracts penal sanctions against the company and each officer of the company.
The main issue was that the defendant, E B Horne, sought to evade a covenant not to compete with the plaintiff by creating a company controlled by his wife to carry out activities that would have breached the covenant.
Non-compliance constitutes an offense and renders the foreign company and its officers liable to a fine not exceeding one hundred thousand shillings, with additional fines for continued non-compliance.
Omitting 'limited' from the name of a company in its legal instruments or business documents to give the impression that the company is unlimited amounts to misdescription and can attract penal consequences.
Section 38(2) requires that the company's name be engraved on the seal in legible characters.
Section 67(1) requires a company to display its name and other information in specified places, state such information in various documents and communications, and provide prescribed information on request.
A registered foreign company must state its name and other specified information in prescribed documents and communications related to its business in Kenya, and provide prescribed information on request.
The officer shall be liable to a fine and to the holder of the bill of exchange, promissory note, cheque, or order for money or goods for the amount thereof, unless it is duly paid by the company.
It becomes necessary to determine when a company acts as an agent of another to ascertain who is actually accountable at law.
Lipman was held personally liable because he conveyed the house to a company he controlled to avoid completing the sale, which was deemed an abuse of corporate form.
Personal liability is justified because officers are the hands and mind by which the company acts.
The abbreviation of 'company' to 'Co' or 'limited' to 'Ltd' in a company's name does not offend the provisions of section 67(1).
No, an agency relationship between a company and its subsidiary or members cannot be inferred merely from control of the company or ownership of its shares or from the level of paid-up capital.
The court held that the attempt was a bare-faced attempt to evade the fundamental principle of company law, which prevents the majority from expropriating the shares of the minority.
It demonstrates the court's willingness to peer beyond the corporate veil and hold officers personally liable for the acts of the company.
Russell J described the company as 'a device and a sham, a mask which Lipman holds before his face in an attempt to avoid recognition by the eye of equity.'
It must be shown that the company in question is a mere sham or a mask used to shield the defendant from personal liability.
Any person who sustains loss may institute civil proceedings for damages.
Atkinson J held that it was a question of fact in each case whether a subsidiary company was carrying on its own business or the business of its parent company.
Cohen LJ held that under the ordinary rules of law, a parent company and a subsidiary company, even a 100% subsidiary company, are distinct legal entities and, in the absence of an agency contract between the two companies, one cannot be said to be the agent of the other.
Section 974(1) of the Companies Act prohibits foreign companies from carrying on business in Kenya unless they are registered under the Act.
The House of Lords held that directing the managing director to confine his attention to the business of one subsidiary was not a breach of the service agreement, thereby ignoring the separate legal personality of the various companies in recognition of the larger group enterprise.
The court held that where a defendant had used a corporate structure as a device or façade to conceal his criminal activities, the court could lift the corporate veil and treat the assets of the company as the realizable property of the defendant.
Misdescription per se does not invalidate an instrument unless it is proved that the instrument was not intended to name the particular company as a party to it.
If a foreign company carries on business in Kenya without registration, the company and each officer in default commit an offence and are liable to a fine not exceeding five million shillings. If the company continues to carry on business after conviction, they commit a further offence each day and are liable to a fine not exceeding five hundred thousand shillings for each repeated offence.
The court held that the American company was liable to pay corporate tax in the United Kingdom because it was carrying on business through its English subsidiary as its agent.
Courts are inclined to pierce the corporate veil where a company's majority shareholding suggests that the separate legal personality of the holding and subsidiary companies is merely a matter of form.
Courts are prepared to hold the principal responsible if an agency relationship subsists either impliedly or by virtue of an express agreement, and in accordance with the rules of law governing the relationship of principal and agent.
The corporate name and the address of its registered office must be stated on all business letters, orders for goods or services to be supplied to the company, invoices and receipts issued in the course of the business, and written demands for the payment of debts arising in the course of business.
The company, not its shareholders or other persons acting as its agents, is liable to pay tax on the profits of its own business.
A common scenario that justifies piercing the corporate veil is when a company is used to evade an existing liability or defeat the application of the law.
Courts might disregard the fundamental principle of corporate personality laid down in Salomon v A Salomon and Co. Ltd if justice demands it.
A company formed to perpetrate a scheme designed to expropriate minority shareholders pursuant to section 618 of the Companies Act, 2015, will not escape legal scrutiny if the power is not exercised in good faith.
No, agency cannot be inferred from the control exercisable by the members over the company either by virtue of their votes in general meeting or because they are also directors, or from the fact that the sole objective of the company is to benefit the members.
Personal liability of individual officers of a company arises when the word 'limited' is omitted altogether from the name of a limited liability company or when the company has otherwise been wrongly described.
Harman LJ described the newly formed company as 'nothing but a little hut built around the majority shareholders and the whole scheme was a hollow sham.'
A company must display its name conspicuously at its place of business. Failure to do so constitutes an offense, making the company and its officers equally liable.
A registered foreign company must paint or affix its name and other specified information conspicuously at its registered office in Kenya.
The court inferred an agency relationship between a holding company and its subsidiary, recognizing the essential unity of the group enterprise rather than the separate legal entity of each company.
A company must ensure that it is at all times described and represented by the name in which it was registered.
A registered foreign company must lodge a written notice of particulars of any changes in its constitution, directors, powers of directors residing in Kenya, local representatives, or the situation of its registered office within one month of the change.
The House of Lords refused to disregard the separate personality of two wholly owned subsidiaries of a holding company, upholding the separateness of the subsidiaries notwithstanding their common governance and management.
The company's name must be displayed at every place where the company carries on business.
Lord Hanworth concluded that the business was being carried on by the defendant through his wife and that the company was a mere device for enabling Mr. Horne to continue to commit breaches of the covenant.
Failure to comply attracts punitive sanctions against the company and each of its officers who is in default.
The court found that the holding company was carrying on a business as an agent of its wholly owned subsidiary.
The court considered if the profits were treated as those of the parent company, if the persons conducting the business were appointed by the parent company, if the parent company was the head and brain of the trading venture, if the parent company governed the adventure and decided what should be done, and if the profits were made by its skill and direction.
There must be a contract of agency between the company and its shareholder for the company to be considered an agent of its shareholder.
In addition to notifying changes in particulars, a foreign company must deliver periodic returns to the Registrar containing prescribed information relating to the company within the prescribed period.
Diplock LJ defined a 'sham' as acts done or documents executed by the parties intended to give third parties or the court the appearance of creating legal rights and obligations different from the actual legal rights and obligations intended by the parties.
The court disregards the legal personality of the company and holds its officers individually liable because they constitute the hands and mind through whom the company acts.
The punitive sanctions are intended to enforce strict compliance and avoid possible mischief or confusion in the course of the company's business.
Omission of a part of a name or addition of other words to a company's name amounts to misdescription, which may result in personal liability for the officer concerned unless the company discharges its obligation under the instrument in question.
The court held that whether an agency relationship exists will depend on an investigation of all aspects of the relationship.
Misdescription of a company as a public limited liability company while it is actually a private company is prohibited and may result in penal sanctions.
The requirement for groups to produce consolidated accounts recognizes the group enterprise or single economic entity of the group while by no means denying the separate legal entity of each company.
Judicial precedent demonstrates that courts will readily disregard the corporate personality of a company formed for a fraudulent purpose or to facilitate evasion of legally binding obligations.
It disregards the usual limitation of personal liability of members and officers of the company for the contractual debts or other legal obligations of the company in certain circumstances, holds such officers liable for contravention of the Act, and provides recourse to third parties prejudicially affected by such contravention for appropriate relief.
A company that is both a limited company and a public company may only be registered with a name that ends with the words 'public limited company' or the abbreviation 'p.l.c' or 'plc'.
The distinction was crucial because an owner-occupier was entitled to compensation while a tenant-occupier was not. The court held that the plaintiffs were entitled to compensation as the business carried on at the premises by the subsidiary was carried on as agents for the plaintiffs.
The court ruled that the use of the trading name in the deed did not infringe any of the requirements of the 1985 (UK) Act or render the bond a nullity, and that extraneous evidence was admissible to identify a contracting party when its identity was not clear from the face of the deed.
No, holding all the shares in a company does not make the business carried on by that company the shareholder's business, nor does it make the company the shareholder's agent for carrying on that business.
A company that is both a limited company and a private company may be registered only with a name that ends with the word 'limited' or the abbreviation 'Ltd'.
Section 56 of the Act prohibits inappropriate use of company type or legal form.
Officers can incur personal liability if they use or authorize the use of any seal purporting to be the seal of the company on which its name is not engraven or which is not in the prescribed form, issue or authorize the issue of any business letter, notice, or other official publication of the company without mentioning its name, or issue or authorize the issue of any bill of parcels, invoice, receipt, or letter of credit of the company without mentioning its name as prescribed by section 67.
A company's name must be displayed in a conspicuous position in any premises where the business is carried on.
The company and its officers or other persons acting on its behalf commit an offence if they use the word 'limited' as part of the company's name to create the impression that it is a limited liability company while it is in truth unlimited.
