Saloman v Saloman - at that time the Company Act required that there be seven members of the company. Saloman and family hold shares, paid:
-GBP10,000 worth of debentures giving a charge over company's asset,
-GBP20,000 of GBP1 shares
-GBP9,000 cash
Mr Saloman then paid off all creditors in full
So he holds 20001 shares, his family hold 6 shares
Insolvent >>
CA: shareholders has to be bona fide but here the family hold the shares just to comply with the Company Act
HL> irrelevant, there is a separate legal personality in this case.
(But Mr Saloman is a sole trader operating through a corporation)
Macaura v Northern Assurance - Mr Macaura sold timber to a company, he then insured the timber. Fire destroyed timber,
HL: Timber belongs to company, not Mr Macaura
company's asset (timber) belong to the company, not its shareholder
Lee v Lee's Air Farming - Mr Lee owned all shares, he is also the pilot. Plan crashed, widow claimed $ and said Mr Lee is a worker. NZ: no. Privy Council: yes because the company and Mr Lee were disctint legal entities
Note: s.3(4) CA 2006 still allows unlimited company to be formed.
Debenture - company can raise money by issuing debentures, it is like an acknowledge of debt, it evidence the fact that the company is liable to pay back a specific amount with interest. The money raised does not become part of the share capital.
Liquidator - a court appointed official
