Macaura V Northern Assurance
Macaura v Northern Assurance Co Ltd 1925 AC 619. Members have no interest in a companys property.
Macaura Vs Northern Assurance Co Ltd Separate Property Youtube
He took insurance for the assets in his name against any fire accident.
. Just as a natural person cannot be held legally accountable for the conduct or obligations of another person unless they have expressly or implicitly. Here the owner of a timber state was a creditor of a company which was majorly owned by him. Salomon v A Salomon Co Ltd 1896 UKHL 1 1897 AC 22 is a landmark UK company law case.
In the case of Macaura v Northern Assurance Co Ltd 1925 the appellant Mr Macaura owned several timber estates in Ireland. The requirements of correctly constituting a limited company. Later on a fire on the estate destroyed the timber.
Salomon v A Salomon and Co Ltd 1897 AC 22. On the banks instructions he insured the property. Establishing the foundation of how a company exists and functions it is perceived as perhaps the most profound and steady rule.
This decision followed the much earlier case of Macaura v Northern Assurance 1925. The effect of the House of Lords unanimous ruling was to uphold firmly the doctrine of corporate personality as set out in the Companies Act 1862 so that creditors of an insolvent company could not sue the companys shareholders for payment of outstanding debts. The corporate veil in the United Kingdom is a metaphorical reference used in UK company law for the concept that the rights and duties of a corporation are as a general principle the responsibility of that company alone.
The owner of a timber estate sold all the timber to a company which was owned almost solely by him. In case of Macaura v Northern Assurance Co. Afterwards Mr Macaura insured the timber with the defendant company in his own name.
Court declared that members have no interest in the company property. Separate Legal Personality SLP is the basic tenet on which company law is premised. He was the owner and sole shareholder of the company but his Insurable interest only extended to the value of the shares in the company and he could not recover when the property was damaged.
He sold them to a company in return for nearly all of the companys share capital. He insured the timber against fire but in his own name. He was the companys largest creditor.
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