Question

Explain in brief the corporate personality of company? {5 marks question of 200 words}

Answer 1

INTRODUCTION

Generally, the aim of a company in Malaysia is to make profits. A company by law is a different person from its subscribers to the memorandum. It involves the principles of corporate personality which include perpetual succession, proprietary interest, debts and the process of suing and being sued (Foss v Harbottle). It is concluded with the main instances of lifting the veil of corporation, such as number of membership, fraudulent trading, evasion of legal obligations, holding and subsidiary company, and publication of name.

PRINCIPLES OF CORPORATE PERSONALITY

Corporate personality is the fact stated by the law that a company is recognized as a legal entity distinct from its members. A company with such personality is an independent legal existence separate from its shareholders, directors, officers and creators. This is famously known as the veil of incorporation.

As a result of corporate personality, a company has perpetual succession. It simply means the company is everlasting and will continue to do business until it is properly wound up. As a separate legal person, a company will not be affected by changes such as death, transfer of shares or resignation of any members but will continue to exist despite the number of times the changes of membership occur. Even if all the members die, it will not influence the privileges, immunities, estates and possessions of a company. The principle of perpetual succession is clearly illustrated in the case of Re Noel Tedman Holdings Pty Ltd (1967).

Answer 2

Explanation:

Corporate personality is the fact stated by the law that a company is recognized as a legal entity distinct from its members. A company with such personality is an independent legal existence separate from its shareholders, directors, officers and creators. This is famously known as the veil of incorporation.