Question

What do you understand by separate legal existence of a company ? In which
circumstances this principle does not apply ?

Answer 1

Answer:

sorry I didn't understand this question sorry

Answer 2

Separate legal existence of a company implies:

• Company or business has independent identity other than its members.
• Rights of the company are other than the rights of its members.
• Any legal action against the company will not imply a legal action against its members in any way.
• Company can hold property in its name.
• Company can take legal action against other companies in its name.
• Entry, exit or death of members do not have any impact on the company.
• mainly found in company and cooperatives.

This principle does not apply when:

• A company does a fraud or does not respond to legal action after which court can take up with its shareholders.

• When number of members are reduced below a required minimum.
• When a company is being investigated then, any of its holding or subsidiary company will also be investigated despite being a separate legal entity.
• Laws of the company which extend to its members when found faulty in complying with the law.
• When members act independent of the company.
• When company doesn't pay taxes after winding up.
• Providing wrong information in prospectus.
• When application money is not paid till the date of issuance of prospectus.
• In case of any investigation.