SECTION A – You MUST answer this question
1. Goodfellas Pasta Ltd (‘Goodfellas’) is one of the wholly owned
subsidiaries of Scorcese Italian Foods Ltd (‘Scorcese’). The profits of
Goodfellas are treated as those of Scorcese. Scorcese is in effective
control of Goodfellas; it also appoints the personnel who conduct the
business in Goodfellas. The office premises owned by Goodfellas have
been compulsorily purchased and compensation will be paid by the
local authority. Scorcese claims that the compensation should be paid
to itself directly as Goodfellas carries on the business as its agent.
Advise Scorcese as to the following:
a) Will the corporate veil of Goodfellas be lifted on the basis of the
existence of an agency relationship between Scorcese and
Goodfellas?
b) Will Scorcese and Goodfellas be treated as one single economic
entity?
c) Will the corporate veil of Goodfellas be lifted on the basis of justice?
SECTION B – You must answer ONE question from this section
2. Critically assess whether the existing safeguards under the Companies
Act 2006 on the maintenance of capital provide adequate protection to
creditors.
3. Critically discuss the various types of insolvency procedure in terms of
what distinguishes them from each other and when each one might be
used, with reference to relevant legislation and case law.
4. ‘The company constitution, as contained in the memorandum and
articles of association, is a key aspect of the effective management of a
company.’
Critically discuss the above statement by reference to relevant
legislation and case law.
5. Critically assess, with reference to relevant legislation and case law,
the extent to which section 994 of the Companies Act 2006 (unfairly
prejudicial conduct) provides effective protection for minority
shareholders.
6. ‘Although the directors of a company have the freedom to manage the
company largely as they see fit, they remain under an obligation to act
in the company’s interests.’
Critically discuss the above statement by reference to relevant
legislation and case law.
