1. Explain the statement that “a company is a legal entity quite separate from the persons who constitute it”.(4 marks)
Discuss the circumstances under which a corporate veil of incorporation may be lifted.(8 marks)
Angela is employed as a managing of Eclipse Ltd.The main object of Eclipse Ltd.is to retail hair products.Angela’s contract of employment contains a clause which states that in the event of her leaving the employment of Eclipse Ltd.she would not solicit Eclipse Ltd.’s customers for a period of three years.
Angela has resigned from her employment and together with Ellina formed another company Angelina Company Ltd.whose main objective is to sell hair products.
Angela has given Marie, a salesperson in Angellina Company Ltd. A list of customers of Eclipse Ltd.to immediately start soliciting the customers for Angellina Company Ltd.
Eclipse Ltd.has learned of these facts and intends to sue Angela,Ellina and Company Ltd.
Advise Eclipse Ltd.(8 marks)
2.(i) Explain the Rule in Royal British Bank v Turquand.(2 marks)
(ii) Enumerate the various exceptions to the rule in (i) above.(6 marks)
The articles of Shirika Company Ltd.provided that the directors had power to determine who should be entitled to sign contracts and documents on behalf of the company.
One director Chapu Chapu, describing himself as the Chairman and without having been so authorized,executed and gave guarantee to Chafua in the name of the company.Shirika Company have found out about the guaranteeexacuted and have refused to honor it as demanded by Chafua.
Explain whether Shirika Company Ltd.is liable with regard to the demands by Chafua.(12 marks)
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