EFFECTS OF INCORPORATION AND LIFTING CORPORATE VEIL

Which of the following statements reflect the concept of separate legal entity;

• the company cannot sue in its own name

• the company cannot be sued in its own name

• the company can hold land

• the company is not liable for its own debts and obligation

The legal recognition given to the company is provided by section 16 Companies Act 2016.

• TRUE

• FALSE

Body corporate means that the company capable of exercising all functions of incorporated body.

• TRUE

• FALSE

As a body corporate, the company has an ability to sue and being sued.

• TRUE

• FALSE

A corporation is a body corporate.

• TRUE

• FALSE

The first recognition of body corporate is in the case of Salomom v Salomon & Co. Ltd.

• TRUE

• FALSE

The proper plaintiff rule was established in the case of Lee v Lee’s Air Farming Ltd.

• TRUE

• FALSE

Perpetual succession means that the life of the company is depended on the life of its shareholders.

• TRUE

• FALSE

The company life can be putted to an end by deregistration.

• TRUE

• FALSE

Syed and Sharipah are shareholders in S&S Corporation. Both held 50% of the company’s shares. They are also the company’s sole director. Later,both of them wish to sell their whole shares in the company to three new investors. What is the effect of this action to S&S Corporation.

• S&S Corporation still exist

• S&S Corporation will be dissolved

• S&S Corporation have to appoint a new promoter

• S&S Corporation have to change their constitution