Company Law in the UK Assignment Example | Topics and Well Written Essays - 1000 words

Company Law in the UK - Assignment Example The ruling of Lord Halsbury seems to uphold the company law that provides that whenever a company is registered, it acquires a separate legal entity and that it can no longer be termed as an agent of its members. In the case of McDaid Development (Ireland) Ltd Company, Mr. Peter McDaid, also the director of the company, was the sole shareholder of the company. On bankruptcy, Mr. McDaid owed the Ireland Bank over  £38 million and about  £800 thousand to small stakeholders. When the company was put under administration, Mr. McDaid was relieved of his duties as a director for a period of eight years on the grounds of misconduct. From the court’s decision in Mr. Salomon’s case, Mr. McDaid cannot be held liable for the company’s debts. Lord Halsbury defended Salomon by the words, â€Å"Company’s debt is Company’s debt† (Wooldridge, 2009, p. 58). As such, company’s debts and the shareholders have little, if not no connection. However, in the U.K. Company law act of 2006, the director is liable to accountability in matters concerning company assets, which Mr. McDaid had failed to provide. On this ground, the removal of Mr. MCDaid is justified. In brief, Company law perceives the company as an entity that is completely isolated from its shareholders. Therefore, it is upon the members, shareholders, and debtors, to evaluate the company’s viability. Though this aspect of the law has been criticized, there is still a lot of support to this ideology of the law.... In the case of McDaid Development (Ireland) Ltd Company, Mr Peter McDaid, also the director of the company, was the sole shareholder of the company. On bankruptcy, Mr McDaid owed the Ireland Bank over ?38 million and about ?800 thousand to small stakeholders. When the company was put under administration, Mr McDaid was relieved of his duties as a director for a period of eight years on the grounds of misconduct. From the court’s decision in Mr Salomon’s case, Mr McDaid cannot be held liable for the company’s debts. Lord Halsbury defended Salomon by the words, â€Å"Company’s debt is Company’s debt† (Wooldridge, 2009, p. 58). As such, company’s debts and the shareholders have little, if not no connection. However, in the U.K. Company law act of 2006, the director is liable to accountability in matters concerning company assets, which Mr McDaid had failed to provide. On this ground, the removal of Mr MCDaid is justified. In brief, Compan y law perceives the company as an entity that is completely isolated from its shareholders. Therefore, it is upon the members, shareholders and debtors, to evaluate the company’s viability before engaging in its operations. Though this aspect of the law has been criticized, there is still a lot of support to this ideology of the law. Question 3 The U.K. company law provides clear guidelines on the duties of Company directors and the consequences of breach of the duties so stated. The expectation of the law is that the director works in the best interest of the company and does not contribute directly to any actions that would hurt the company and its shareholder. Consequently, there exist liabilities and penalties for a