Company Law - Practice Paper 3

"The separate legal personality doctrine, while essential for commercial certainty, has become a shield for corporate irresponsibility." Critically discuss this statement with reference to multinational corporate groups, environmental liability, and recent proposals for reform of corporate accountability.

Quantum Technologies Ltd has five directors. The company's articles provide that the quorum for board meetings is three directors. At a meeting attended by only two directors (Emma and Farid), they pass a resolution to allot new shares to themselves, diluting the other shareholders from 60% to 20%. They also resolve to remove the company's auditor mid-term and appoint Emma's accountancy firm as replacement. A third director, George, was given only one hour's notice of the meeting instead of the seven days required by the articles. Shareholder Hana (originally 25%, now diluted to 8%) seeks your advice. Discuss all legal issues arising.

Evaluate the effectiveness of director disqualification under the Company Directors Disqualification Act 1986 as a mechanism for protecting the public from unfit directors. Consider both mandatory and discretionary disqualification and the use of disqualification undertakings.

Stellar Dynamics Ltd is a private company with articles based on the Model Articles. Three shareholders — Ingrid (50%), James (30%), and Keiko (20%) — initially agreed informally that all would serve as directors and major decisions would be unanimous. After a dispute, Ingrid and James remove Keiko as a director by ordinary resolution and amend the articles to allow dividend payments only to shareholders who are also directors. They also refuse to register a transfer of Keiko's shares to a third-party buyer. Keiko seeks comprehensive advice on challenging these actions.

"The UK's approach to corporate criminal liability is fundamentally flawed and requires comprehensive reform." Discuss with reference to the identification doctrine, the failure to prevent offences model, and comparative approaches.