Company Law [ACTUAL EXAM] LATEST VERSION
[QUESTIONS AND ANSWERS] WITH STUDY GUIDE
DETAILED AND VERIFIED FOR GUARANTEED PASS-
LATEST UPDATE 2025 GRADED A
Gifford Motor Co. Ltd v Horne (1933) - CORRECT ANSWER The corporate veil
can be lifted and the separate legal personality of a company can be discarded when it
is used as a mere "cloak" or "sham" to avoid legal obligations.
Jones v Lipman (1962) - CORRECT ANSWER The corporate veil can be lifted and
the separate legal personality of a company can be discarded when it is used as a mere
"cloak" or "sham" to avoid legal obligations.
Adams v Cape Industries (1990) - CORRECT ANSWER A parent company may
be held directly liable for the actions of its subsidiary if it has assumed a duty of care,
particularly in matters of health and safety.
Prest v Petrodel Resources Ltd (2013) - CORRECT ANSWER The court could
pierce the corporate veil in certain circumstances.
Chandler v Cape Plc (2012) - CORRECT ANSWER An employer's parent
company owed an injured employee of a subsidiary company a duty of care
Brumder v Motornet [2013] EWCA Civ 195 - CORRECT ANSWER Replying on the
Ginty defence did not involve lifting the corporate veil
Campbell v Gordon (2016) - CORRECT ANSWER The corporate veil could only
be pierced to impose liability on individuals through whom the company acts if it was
expressly or impliedly provided for by the statute.
Khan v Miah (2000) - CORRECT ANSWER If you behave as partners the law
deems you to be partners.
Salomon v Salomon & Co (1897) - CORRECT ANSWER A company and its
owners have separate legal personalities.
,Hickman v Kent and Romney Sheepbreeders' Association (1915) - CORRECT
ANSWER Companies must adhere to their own rules when making decisions that
affect the rights of its members.
Pender v Lushington (1877) - CORRECT ANSWER Companies must adhere to
their own rules when making decisions that affect the rights of its members.
Rayfield v Hands (1958) - CORRECT ANSWER The articles bind members to
each other as well as to the company.
Elegy v The Positive Government Security Life Assurance Company Ltd (1876) -
CORRECT ANSWER An outsider cannot sue a company based on breach of the
articles.
Allen v Gold Reefs of Africa Ltd (1900) - CORRECT ANSWER Changing the
articles must be in the best interests of the company.
Bushell v Faith (1970) - CORRECT ANSWER There may be conditions attached
to making alterations which effectively restrict the ways in which the articles can be
amended.
Aluminium Industries Vaassen BV v Romalpa Aluminium Ltd [1976} - CORRECT
ANSWER A valid retention of title clause returns stock to the supplier in the event of
non-payment for the goods.
Hendy Lennox (Industrial Engines) Ltd v Grahame Puttick Ltd (1984) - CORRECT
ANSWER A valid region of title clause returns stock to supplier if it can be identified.
Re Kiss Cards Ltd; Smith and Others v Lawson (2016) - CORRECT ANSWER A
transaction at an undervalue is illegal under the Insolvency Act 1986.
Kelner v Baxter (1866) - CORRECT ANSWER A promoter is responsible for pre-
incorporation contracts.
Phonogram Ltd. V Lane (1981) - CORRECT ANSWER A promoter is responsible
for pre-incorporation contracts unless there is a specific clause to the contrary.
Foss v Harbottle (1873) - CORRECT ANSWER When a company is wronged by
its directors it is only the company that has standing to sue. The 'majority rule principle'.
MacDougall v Gardiner (1874) - CORRECT ANSWER If the wrong could be put
right by a simple majority vote, there was no point in the court getting involved.
,Cook v Deeks (1916) - CORRECT ANSWER There can be a derivative action, if
there is fraud on the minority.
Eastman (Kilner House) Ltd v GLC (1982) - CORRECT ANSWER There can be
derivative action, if there is fraud on the minority.
Pavlides v Jensen (1956) - CORRECT ANSWER Directors' gross negligence in
exercising their duties, when they had not benefited from that negligence, does not
amount fraud.
Re Cumana Ltd (1986) - CORRECT ANSWER If the value of the minority
shareholding its diminished or put at risk by those in control of the company, in a way
which is unfair, then it can be actioned.
Re London School of Electronics Ltd (1986) - CORRECT ANSWER If value of the
minority shareholding its diminished or put at risk by those in control of the company, in
a way which is unfair, then it can be actioned.
O'Neill v Phillips (1999) - CORRECT ANSWER A member of a company will not
ordinarily be able to complain of unfairness unless there is a breach of the terms on
which he agreed the affairs of the company should be conducted.
Ebrahimi v Westbourne Galleries (1973) - CORRECT ANSWER A member of
company will not ordinarily be able to complain of unfairness unless there is a breach of
the terms on which he agreed the affairs of the company should be conducted.
Re Maidstone Buildings Provision Ltd (1971) - CORRECT ANSWER A company
secretary, merely performing the duties of such office, is not a part to the company's
business.
Pierce v Mills & Co. (1920) - CORRECT ANSWER A director must act within their
powers in the best interests of the company.
Percival v Wright (1902) - CORRECT ANSWER A director must act within their
powers in the best interests of the company and not to shareholders individually.
Re Smith and Fawcett Ltd (1942) - CORRECT ANSWER Directors must exercise
their discretion bona fide in what they consider - not what a court may consider - is the
interests of the company, and not for any collateral purpose.
Bolting v Association of Cine tele and Allied Technicians (1963) - CORRECT
ANSWER A directory cannot enter into an agreement to do something that is
inconsistent with their duty to the company.
, Re City Equitable Fire Insurance Co Ltd (1925) - CORRECT ANSWER The courts
do not require directors to exhibit a greater degree of skill than may reasonably be
expected from a person with their knowledge and experience.
Boston Deep Sea Fishing Ltd v Ansell (1888) - CORRECT ANSWER A director
has a responsibility to the company they are a director of.
Bray v Ford (1896) - CORRECT ANSWER It is an inflexible rule of a court that a
person in a fiduciary position is not, unless otherwise expressly provided, allowed to put
himself in a position where is interest and duty conflict.
Regal (Hastings) Ltd v Gulliver (1942) - CORRECT ANSWER A director has to
declare an interest in a proposed transaction.
Industrial Development Consultants Ltd v Cooley (1972) - CORRECT ANSWER If
a director has an opportunity as a consequence of his rule, they cannot resign and take
advantage of that opportunity.
Island Export Finance Ltd v Umunna (1986) - CORRECT ANSWER If a company
rejects an opportunity, a directors is entitled to subsequently take that opportunity
personally.
Bhullar v Bhullar (2003) - CORRECT ANSWER Even if a director thinks that the
company won't be interested in an opportunity, they must still inform the company
before taking it themself.
Peso Silver Mines Ltd v Copper (1966) - CORRECT ANSWER If a company
rejects an opportunity, a director is entitled to subsequently take that opportunity
personally - unless they influenced the decision to reject.
O'Donnell v Shanahan (2009) - CORRECT ANSWER If an opportunity is outside
of the usual business, a directors still has to offer it to the company first if they
discovered the opportunity through their role as a director.
Foster Bryant Surveying Ltd v Bryant (2007) - CORRECT ANSWER If a director
has resigned from their role but are still employed, they can take advantage of an
opportunity subsequently encountered.
Hutton v West Cork Railway (1883) - CORRECT ANSWER A director is only paid
if there is an agreement to do so.
Financial Services Authority v Massey (2011) - CORRECT ANSWER Insider
dealing is illegal if you trade and make profit for yourself.
[QUESTIONS AND ANSWERS] WITH STUDY GUIDE
DETAILED AND VERIFIED FOR GUARANTEED PASS-
LATEST UPDATE 2025 GRADED A
Gifford Motor Co. Ltd v Horne (1933) - CORRECT ANSWER The corporate veil
can be lifted and the separate legal personality of a company can be discarded when it
is used as a mere "cloak" or "sham" to avoid legal obligations.
Jones v Lipman (1962) - CORRECT ANSWER The corporate veil can be lifted and
the separate legal personality of a company can be discarded when it is used as a mere
"cloak" or "sham" to avoid legal obligations.
Adams v Cape Industries (1990) - CORRECT ANSWER A parent company may
be held directly liable for the actions of its subsidiary if it has assumed a duty of care,
particularly in matters of health and safety.
Prest v Petrodel Resources Ltd (2013) - CORRECT ANSWER The court could
pierce the corporate veil in certain circumstances.
Chandler v Cape Plc (2012) - CORRECT ANSWER An employer's parent
company owed an injured employee of a subsidiary company a duty of care
Brumder v Motornet [2013] EWCA Civ 195 - CORRECT ANSWER Replying on the
Ginty defence did not involve lifting the corporate veil
Campbell v Gordon (2016) - CORRECT ANSWER The corporate veil could only
be pierced to impose liability on individuals through whom the company acts if it was
expressly or impliedly provided for by the statute.
Khan v Miah (2000) - CORRECT ANSWER If you behave as partners the law
deems you to be partners.
Salomon v Salomon & Co (1897) - CORRECT ANSWER A company and its
owners have separate legal personalities.
,Hickman v Kent and Romney Sheepbreeders' Association (1915) - CORRECT
ANSWER Companies must adhere to their own rules when making decisions that
affect the rights of its members.
Pender v Lushington (1877) - CORRECT ANSWER Companies must adhere to
their own rules when making decisions that affect the rights of its members.
Rayfield v Hands (1958) - CORRECT ANSWER The articles bind members to
each other as well as to the company.
Elegy v The Positive Government Security Life Assurance Company Ltd (1876) -
CORRECT ANSWER An outsider cannot sue a company based on breach of the
articles.
Allen v Gold Reefs of Africa Ltd (1900) - CORRECT ANSWER Changing the
articles must be in the best interests of the company.
Bushell v Faith (1970) - CORRECT ANSWER There may be conditions attached
to making alterations which effectively restrict the ways in which the articles can be
amended.
Aluminium Industries Vaassen BV v Romalpa Aluminium Ltd [1976} - CORRECT
ANSWER A valid retention of title clause returns stock to the supplier in the event of
non-payment for the goods.
Hendy Lennox (Industrial Engines) Ltd v Grahame Puttick Ltd (1984) - CORRECT
ANSWER A valid region of title clause returns stock to supplier if it can be identified.
Re Kiss Cards Ltd; Smith and Others v Lawson (2016) - CORRECT ANSWER A
transaction at an undervalue is illegal under the Insolvency Act 1986.
Kelner v Baxter (1866) - CORRECT ANSWER A promoter is responsible for pre-
incorporation contracts.
Phonogram Ltd. V Lane (1981) - CORRECT ANSWER A promoter is responsible
for pre-incorporation contracts unless there is a specific clause to the contrary.
Foss v Harbottle (1873) - CORRECT ANSWER When a company is wronged by
its directors it is only the company that has standing to sue. The 'majority rule principle'.
MacDougall v Gardiner (1874) - CORRECT ANSWER If the wrong could be put
right by a simple majority vote, there was no point in the court getting involved.
,Cook v Deeks (1916) - CORRECT ANSWER There can be a derivative action, if
there is fraud on the minority.
Eastman (Kilner House) Ltd v GLC (1982) - CORRECT ANSWER There can be
derivative action, if there is fraud on the minority.
Pavlides v Jensen (1956) - CORRECT ANSWER Directors' gross negligence in
exercising their duties, when they had not benefited from that negligence, does not
amount fraud.
Re Cumana Ltd (1986) - CORRECT ANSWER If the value of the minority
shareholding its diminished or put at risk by those in control of the company, in a way
which is unfair, then it can be actioned.
Re London School of Electronics Ltd (1986) - CORRECT ANSWER If value of the
minority shareholding its diminished or put at risk by those in control of the company, in
a way which is unfair, then it can be actioned.
O'Neill v Phillips (1999) - CORRECT ANSWER A member of a company will not
ordinarily be able to complain of unfairness unless there is a breach of the terms on
which he agreed the affairs of the company should be conducted.
Ebrahimi v Westbourne Galleries (1973) - CORRECT ANSWER A member of
company will not ordinarily be able to complain of unfairness unless there is a breach of
the terms on which he agreed the affairs of the company should be conducted.
Re Maidstone Buildings Provision Ltd (1971) - CORRECT ANSWER A company
secretary, merely performing the duties of such office, is not a part to the company's
business.
Pierce v Mills & Co. (1920) - CORRECT ANSWER A director must act within their
powers in the best interests of the company.
Percival v Wright (1902) - CORRECT ANSWER A director must act within their
powers in the best interests of the company and not to shareholders individually.
Re Smith and Fawcett Ltd (1942) - CORRECT ANSWER Directors must exercise
their discretion bona fide in what they consider - not what a court may consider - is the
interests of the company, and not for any collateral purpose.
Bolting v Association of Cine tele and Allied Technicians (1963) - CORRECT
ANSWER A directory cannot enter into an agreement to do something that is
inconsistent with their duty to the company.
, Re City Equitable Fire Insurance Co Ltd (1925) - CORRECT ANSWER The courts
do not require directors to exhibit a greater degree of skill than may reasonably be
expected from a person with their knowledge and experience.
Boston Deep Sea Fishing Ltd v Ansell (1888) - CORRECT ANSWER A director
has a responsibility to the company they are a director of.
Bray v Ford (1896) - CORRECT ANSWER It is an inflexible rule of a court that a
person in a fiduciary position is not, unless otherwise expressly provided, allowed to put
himself in a position where is interest and duty conflict.
Regal (Hastings) Ltd v Gulliver (1942) - CORRECT ANSWER A director has to
declare an interest in a proposed transaction.
Industrial Development Consultants Ltd v Cooley (1972) - CORRECT ANSWER If
a director has an opportunity as a consequence of his rule, they cannot resign and take
advantage of that opportunity.
Island Export Finance Ltd v Umunna (1986) - CORRECT ANSWER If a company
rejects an opportunity, a directors is entitled to subsequently take that opportunity
personally.
Bhullar v Bhullar (2003) - CORRECT ANSWER Even if a director thinks that the
company won't be interested in an opportunity, they must still inform the company
before taking it themself.
Peso Silver Mines Ltd v Copper (1966) - CORRECT ANSWER If a company
rejects an opportunity, a director is entitled to subsequently take that opportunity
personally - unless they influenced the decision to reject.
O'Donnell v Shanahan (2009) - CORRECT ANSWER If an opportunity is outside
of the usual business, a directors still has to offer it to the company first if they
discovered the opportunity through their role as a director.
Foster Bryant Surveying Ltd v Bryant (2007) - CORRECT ANSWER If a director
has resigned from their role but are still employed, they can take advantage of an
opportunity subsequently encountered.
Hutton v West Cork Railway (1883) - CORRECT ANSWER A director is only paid
if there is an agreement to do so.
Financial Services Authority v Massey (2011) - CORRECT ANSWER Insider
dealing is illegal if you trade and make profit for yourself.
