Bugi, Palas, Togi pulled their resources to form an incorporated company named Kaskala Company Limited. In later years, differences arose among the three. All of them claimed ownership of the Company.
Required:
Explain whether any of them can claim ownership of the company. (6 marks)
View Solution
- An incorporated company may be, a company limited by shares, a company limited by guarantee, and unlimited company. Kaskala Company Limited under the Companies Act, 1963 ACT 179 (section 16(a) becomes a Company limited by shares with the word Limited as the last word of the name.
- An incorporated company- a company limited by shares is a company with separate legal personality, distinct from its members with powers of a natural person (Salomon V Salomon), a body corporate (section 14(5) of ACT 179) and all the powers of a natural person of full capacity (section 24 of ACT 179).
- Bugi, Palas and Togi are at best members/shareholders/subscribers to the Regulations of the Company (section 30 of ACT 179).
- None of them can claim ownership of the Company since the Company by its legal personality exists on its own. (1.5 mark)