Marketing Research Assingment
ASSIGNMENT 2
(Group Assignment)
(15%)
Instruction: Answer ONE (1) Question Only.
1. The decision of the House of Lords in Salomon v Salomon & Co LTD (1897) AC 22 has been described as “calamitous” by Otto Kahn Freund. To what extent do you agree with such a view?
2. Critically assess the various provisions under the Companies Act 1965 under which the corporate veil may be pierced, highlighting their shortcomings, if any, and suggest improvements to those provisions for greater efficacy.
3. Though the Courts have, in a number of situations, lifted the veil of corporation to ensure that the grant of the corporate status is not abused, more could be done to ensure justice, especially to make holding companies liable for the debts of their subsidiaries. Discuss.
4. The common law doctrine of ultra vires has no place in Malaysia in view of the provisions of the Companies Act 1965.
Critically consider the accuracy of the above statement.
ANSWER
Fact:
Mr. Aron Salomon made leather boots and shoes in a large Whitechapel High Street establishment. He ran his business for 30 years and "he might fairly have counted upon retiring with at least £10,000 in his pocket." His sons wanted to become business partners, so he turned the business into a limited company. His wife and five eldest children became subscribers and two eldest sons also directors. Mr. Salomon took 20,001 of the company's 20,006 shares. The price fixed by the contract for the sale of the business to the company was £39,000. According to the court, this was "extravagent" and not "anything that can be called a business like or reasonable estimate of value." Transfer of the business took place on June 1, 1892. The purchase money the company paid to Mr. Salomon for the business was £20,000. The company also gave Mr. Salomon £10,000 in debentures (i.e., Salomon gave the company a £10,000 loan, secured by a charge over the assets of the company). The balance paid
(Group Assignment)
(15%)
Instruction: Answer ONE (1) Question Only.
1. The decision of the House of Lords in Salomon v Salomon & Co LTD (1897) AC 22 has been described as “calamitous” by Otto Kahn Freund. To what extent do you agree with such a view?
2. Critically assess the various provisions under the Companies Act 1965 under which the corporate veil may be pierced, highlighting their shortcomings, if any, and suggest improvements to those provisions for greater efficacy.
3. Though the Courts have, in a number of situations, lifted the veil of corporation to ensure that the grant of the corporate status is not abused, more could be done to ensure justice, especially to make holding companies liable for the debts of their subsidiaries. Discuss.
4. The common law doctrine of ultra vires has no place in Malaysia in view of the provisions of the Companies Act 1965.
Critically consider the accuracy of the above statement.
ANSWER
Fact:
Mr. Aron Salomon made leather boots and shoes in a large Whitechapel High Street establishment. He ran his business for 30 years and "he might fairly have counted upon retiring with at least £10,000 in his pocket." His sons wanted to become business partners, so he turned the business into a limited company. His wife and five eldest children became subscribers and two eldest sons also directors. Mr. Salomon took 20,001 of the company's 20,006 shares. The price fixed by the contract for the sale of the business to the company was £39,000. According to the court, this was "extravagent" and not "anything that can be called a business like or reasonable estimate of value." Transfer of the business took place on June 1, 1892. The purchase money the company paid to Mr. Salomon for the business was £20,000. The company also gave Mr. Salomon £10,000 in debentures (i.e., Salomon gave the company a £10,000 loan, secured by a charge over the assets of the company). The balance paid