sign that the growth and reform is at an end. In addition, there are now two
established series of specialist company law reports (Butterworths Company
Law Cases and British Company Cases) which have obviously resulted in many
more cases reaching the public domain for comment and analysis. Further, no
work on Company Law can now ignore the extra-legal controls and influences
on director�s conduct contained in the recent reports on corporate governance
nor the proposals for reform put forward, in particular, by the Law
Commission. This edition deals with the main features of both the Law
Commission�s Report on Shareholder Remedies and the Law Commission�s
Consultation Paper on the reform of director�s duties.
This all places enormous pressure on any undergraduate course which
bears the general title of company law, especially if it is accompanied by the
increasing time constraints placed on undergraduate law courses with the
move towards modular degrees. To a certain extent, some topics, such as
securities regulation and insolvency, can be isolated and treated separately
but there is a considerable, interrelated core to company law which simply has
to be covered. From the point of view of the student, some kind of perspective
needs to be maintained of the subject as a whole so that this core can be
understood and applied.
I have attempted in this book to present the core principles of company
law in a readable and intelligible form, focussing particularly on important
cases and extracting key passages of judgment. This is to acknowledge that,
despite being a statute based subject, like any subject in a common law
jurisdiction, the law �lives in� the cases. Further, a more immediate pragmatic
reason for doing so for most of the readers of this book is that examination
questions tend to focus on issues which have received judicial attention.
I have been ably assisted by Jennifer James of the University of Reading,
who has written the chapter on company charges, an area where the law has
experienced considerable changes in the last few years. Overall responsibility
for the accuracy of the book, however, remains mine. I would like to express
my gratitude to all at Cavendish who have worked on the book.
I have attempted to state the law as at 1 March 1999.
References to the 1985 Act and the 1989 Act throughout the book are to the
Companies Act 1985 and the Companies Act 1989 respectively.
Simon Goulding
Norwich
March 1999
vii
PREFACE

CONTENTS
Preface vii
Table of Cases xv
Table of Statutes xxxvii
Table of Statutory Instruments xlv
Table of European Legislation xlvii
1 Introduction 1
GENERAL 1
PUBLIC AND PRIVATE COMPANIES 2
COMPANIES AND PARTNERSHIPS 5
FEATURES OF THE REGISTERED COMPANY 5
Incorporation by registration 5
Transferable shares 8
Limited liability 9
Disclosure and formality 11
The advantages of forming a company 13
The purpose of company law 15
The sources and reform of company law 16
2 Formation and Promotion 27
FORMATION 27
Company names 29
Promoters 32
PROTECTION OF SUBSCRIBERS AND ALLOTTEES OF SHARES 38
Civil liability 38
Criminal liability 46
PRE-INCORPORATION CONTRACTS 47
3 Corporate Personality and the Registered Company 53
THE REGISTERED COMPANY AS A SEPARATE PERSON 53
CORPORATE LIABILITY 56
Identification theory 56
Corporate criminal liability 58
Lennard�s Carrying Co re-appraised: the attribution theory 61
LIFTING THE VEIL OF INCORPORATION 66
Judicial lifting the veil 66
Statutory lifting the veil 79
Miscellaneous legislative provisions 88
4 The Constitution of the Registered Company 91
THE MEMORANDUM OF ASSOCIATION 91
THE ARTICLES OF ASSOCIATION 94
The contractual effect of the articles 94
ix
Alteration of the articles 103
The articles and separate contracts 109
USING THE CONSTITUTION TO CONTRACT
OUT OF COMPANY LAW 115
5 Corporate Decision Making 117
THE GENERAL MEETING 117
Introduction 117
The basic requirements 119
Annual general meeting 120
Extraordinary general meeting 121
Notices 122
Circulars 123
Power of the court to order a meeting 124
Resolutions 126
Voting 128
Proxy voting 130
Exercise of the right to vote in general meeting 132
Unanimous informal agreement 134
Written resolutions 138
BOARD MEETINGS 141
THE RELATIONSHIP BETWEEN THE BOARD
OF DIRECTORS AND THE GENERAL MEETING 144
THE RESIDUAL POWERS AND ROLE OF
THE GENERAL MEETING 149
Shareholders� powers to remove directors 150
Ratification and approval of irregularities 152