11. Borrowing and security

This chapter considers borrowing as an important method of financing a company’s activities and security as a right of recourse against company property if the loan is not repaid on time. It begins by discussing security for financial obligations, paying particular attention to security contracts, the redemption or discharge of security, and the realisation of security. It then turns to the registration of non-possessory security contracts, the priorities of legal and equitable charges, and floating charges as a form of security and their crystallisation. The extent to which the assets of anyone considering extending credit to a company are already charged as security is also explained. The chapter considers three particularly significant court cases: Evans v Rival Granite Quarries Ltd [1910] 2 KB 979; Re Spectrum Plus Ltd [2005] UKHL 41, [2005] 2 AC 680; and Re Yorkshire Woolcombers Association Ltd [1903] 2 Ch 284.

11. Borrowing and security

10.1093/he/9780198815105.003.0011 ◽

2018 ◽

Author(s):

Derek French

Keyword(s):

Court Cases ◽

Important Method ◽

Financial Obligations ◽

A Company ◽

This chapter considers borrowing as an important method of financing a company’s activities, and security as a right of recourse against company property if the loan is not repaid on time. It begins by discussing security for financial obligations, paying particular attention to security contracts, the redemption or discharge of security and the realisation of security. It then turns to the registration of non-possessory security contracts, the priorities of legal and equitable charges and floating charges as a form of security and their crystallisation. The extent to which the assets of a company to which anyone is considering extending credit are already charged as security is also explained. The chapter considers three particularly significant court cases: Evans v Rival Granite Quarries Ltd [1910] 2 KB 979; Re Spectrum Plus Ltd [2005] UKHL 41, [2005] 2 AC 680; and Re Yorkshire Woolcombers Association Ltd [1903] 2 Ch 284.

11. Borrowing and security

Mayson, French & Ryan on Company Law ◽

10.1093/he/9780198841517.003.0011 ◽

2019 ◽

pp. 282-319

Author(s):

Derek French

Keyword(s):

Court Cases ◽

Important Method ◽

Financial Obligations ◽

A Company ◽

This chapter considers borrowing as an important method of financing a company’s activities, and security as a right of recourse against company property if the loan is not repaid on time. It begins by discussing security for financial obligations, paying particular attention to security contracts, the redemption or discharge of security and the realisation of security. It then turns to the registration of non-possessory security contracts, the priorities of legal and equitable charges and floating charges as a form of security and their crystallisation. The extent to which the assets of a company, to which anyone is considering extending credit, are already charged as security is also explained. The chapter considers three particularly significant court cases: Evans v Rival Granite Quarries Ltd [1910] 2 KB 979; Re Spectrum Plus Ltd [2005] UKHL 41, [2005] 2 AC 680; and Re Yorkshire Woolcombers Association Ltd [1903] 2 Ch 284.

11. Borrowing and security

10.1093/he/9780198870029.003.0011 ◽

2021 ◽

pp. 277-314

Author(s):

Derek French

Keyword(s):

Court Cases ◽

Important Method ◽

Financial Obligations ◽

A Company ◽

This chapter considers borrowing as an important method of financing a company’s activities, and security as a right of recourse against company property if the loan is not repaid on time. It begins by discussing security for financial obligations, paying particular attention to security contracts, the redemption or discharge of security and the realisation of security. It then turns to the registration of non-possessory security contracts, the priorities of legal and equitable charges and floating charges as a form of security and their crystallisation. The extent to which the assets of a company, to which anyone is considering extending credit, are already charged as security is also explained. The chapter considers three particularly significant court cases: Evans v Rival Granite Quarries Ltd [1910] 2 KB 979; Re Spectrum Plus Ltd [2005] UKHL 41, [2005] 2 AC 680; and Re Yorkshire Woolcombers Association Ltd [1903] 2 Ch 284.

10. Distributions and maintenance of capital

Mayson, French & Ryan on Company Law ◽

10.1093/he/9780198841517.003.0010 ◽

2019 ◽

pp. 252-281

Author(s):

Derek French

Keyword(s):

General Principle ◽

Common Law ◽

Court Cases ◽

Share Capital ◽

Capital Transfer ◽

The Common ◽

This chapter examines the controls imposed on return of a company’s capital to its members, first by considering the common law general principle that return of capital to shareholders is illegal unless permitted by statute. It then discusses the problem of how to distinguish between a legal distribution of profits and an illegal return of capital; transfer of profits to a capital redemption reserve and use of profits to pay up bonus shares; company’s issuance and redemption of redeemable shares or purchase of its own shares; purchased shares as treasury shares; and how a company may reduce its issued share capital by special resolution. The chapter also looks at capitalisations and employees’ share schemes. It includes analysis of three court cases that are particularly significant to distributions and the maintenance of capital.

19. Acting for a company: agency and attribution

Mayson, French & Ryan on Company Law ◽

10.1093/he/9780198797234.003.0019 ◽

2017 ◽

Author(s):

Derek French

Keyword(s):

Criminal Liability ◽

Court Cases ◽

Legal Relationship ◽

Relationship Of ◽

This chapter deals with the legal relationship of agency that exists between the company and the agent, explaining the process involved in an agent’s authentication and the execution of documents for the company he or she represents. It then considers two ways in which a company may become contractually bound to another person (a ‘contractor’) under the provisions of the Companies Act 2006: through a written contract to which the company’s common seal is affixed, or when someone has made a contract on behalf of the company. It also discusses the company’s capacity to enter into contracts, with emphasis on the ultra vires rule, and attribution by a court so as to impose criminal liability on a company. A number of court cases relevant to the discussion are cited.

5. Corporate personality

10.1093/he/9780198778301.003.0005 ◽

2016 ◽

Author(s):

Derek French ◽

Stephen W. Mayson ◽

Christopher L. Ryan

Keyword(s):

Human Rights ◽

Corporate Law ◽

Court Cases ◽

Controlling Shareholder ◽

Legal Personality ◽

Legal Proceedings ◽

Personal Rights ◽

Piercing The Corporate Veil ◽

A Company ◽

Corporate Personality

This chapter deals with the legal personality of a company which is separate from its members, capable of owning property, entering into contracts, and being a party to legal proceedings. It considers the case Salomon v A Salomon and Co Ltd [1897] AC 22, in which the courts affirmed separate corporate personality by rejecting attempts, on behalf of creditors, to impose liability for a failed company’s debts on its controlling shareholder. The consequences of separate corporate personality are also discussed, particularly with respect to a company’s human rights (or personal rights). In addition, the chapter examines the process known as ‘piercing the corporate veil’ in relation to the evasion principle; how an artificial entity can have legal personality; and a number of particularly significant court cases. Finally, it looks at corporate law theory and the issue of company linguistics.

19. Acting for a company: agency and attribution

10.1093/he/9780198815105.003.0019 ◽

2018 ◽

Author(s):

Derek French

Keyword(s):

Criminal Liability ◽

Court Cases ◽

Legal Relationship ◽

Relationship Of ◽

This chapter deals with the legal relationship of agency that exists between the company and the agent, explaining the process involved in an agent’s authentication and the execution of documents for the company he or she represents. It then considers two ways in which a company may become contractually bound to another person (a ‘contractor’) under the provisions of the Companies Act 2006: through a written contract to which the company’s common seal is affixed, or when someone has made a contract on behalf of the company. It also discusses the company’s capacity to enter into contracts, with emphasis on the ultra vires rule, and attribution by a court so as to impose criminal liability on a company. A number of court cases relevant to the discussion are cited.

The Nature of Payment Problems in the New Zealand Construction Industry

Construction Economics and Building ◽

10.5130/ajceb.v11i2.2171 ◽

2011 ◽

Vol 11 (2) ◽

pp. 22-33 ◽

Cited By ~ 4

Author(s):

Thanuja Ramachandra ◽

James Olabode Rotimi

Keyword(s):

New Zealand ◽

Construction Industry ◽

Cash Flow ◽

General Construction ◽

Court Cases ◽

Significant Percentage ◽

Construction Companies ◽

Financial Obligations ◽

Specific Construction ◽

Property Developers

Delay and loss of payment is a serious problem in the construction industry of many countries. These affect the cash flow of contractors which is critical to meeting their financial obligations. Payment defaults by the principal leads to insolvency of contractors and in turn other parts of the project chain. In recognition of some of these problems, most countries have established payment-specific construction industry legislation and other contractual measures to mitigate the problems, but nevertheless the problem persists. In this context, the paper examines the nature of payment problems in the construction industry in New Zealand. It is part of a larger study, that seeks solutions to payment losses in the construction industry.The study uses two approaches; an analysis of liquidators’ reports, and an analysis of court cases involving payment disputes to determine the magnitude of payment problems on construction parties. The findings are presented using simple descriptive and interpretive analyses. The study finds that trade creditors are impacted negatively (payment delays and losses) by the liquidation of property developers, general construction and construction trade companies. 75% of trade creditors are unable to be paid fully by these categories of construction companies after liquidation proceedings. Liquidation proceedings take an average 18 months before they are finalised. The analysis of court cases found that 80% of payment disputes are between principals and contractors; with considerably significant percentage of disputes resulting in outright loss of payments. Only 40% of the cases are successful, in which case claimants are able to fully recover the amount in dispute. Payment losses are more prevalent in liquidation than delays and unlike in legal disputes, there is no security for those losses. The study finds that construction parties use remedies contained in the security of payment provisions within standard conditions of contract, and legislative documents.

3. Articles of Association

10.1093/he/9780198778301.003.0003 ◽

2016 ◽

Author(s):

Derek French ◽

Stephen W. Mayson ◽

Christopher L. Ryan

Keyword(s):

West Africa ◽

Court Cases ◽

Principal Element ◽

The Right ◽

This chapter deals with articles of association, the principal element of a company’s constitution, under the Companies Act 2006. It describes the content of the articles, model articles of association which can be adopted by limited companies (either in whole or in part) on registration, and the function of articles as a contract between the company and its members and between the members themselves. It also considers provisions of articles that may be incorporated in other contracts, the right of members of a company to amend its articles, and provision allowing a company to restrict its objects. The chapter discusses a number of particularly significant court cases, including Allen v Gold Reefs of West Africa Ltd [1900] 1 Ch 656 and Quin and Axtens Ltd v Salmon [1909] AC 442.