Company and Commercial Law
Company and Commercial Law
This domain tests the Company Act 2063, Sale of Goods Act 2065, Negotiable Instruments Act 2034 and Arbitration Act 2055. Expect questions on incorporation, corporate personality, directors, shares, commercial contracts and dispute resolution.
Core rules
- A company is a separate legal person with perpetual succession and limited liability.
- Incorporation requires memorandum, articles, prescribed documents and registration; the certificate brings the company into existence.
- Directors owe fiduciary and statutory duties; they must act in the company's best interests.
- Shareholders generally cannot sue for wrongs done to the company unless the law permits a derivative or oppression remedy.
- Sale of goods, negotiable instruments and arbitration are governed by their specific statutes.
Worked example
A director uses company funds to buy personal property. The company suffers loss. The proper plaintiff is the company, not an individual shareholder, because the wrong is done to the company. The board may sue the director for breach of duty. A shareholder may seek a statutory remedy only if the Act allows it.
Traps
Do not treat a private company as a partnership. Do not confuse memorandum with articles. Do not assume a pre-incorporation contract binds the company automatically; adoption or novation may be needed. Check whether board or shareholder approval is mandatory.