Attributes of Separate Legal Personality in terms of Context of Person, Privacy, Nationality and Domicile of a Company Register with Companies House UK

17 Nov

A company as a separate legal personality may have right to own its property that it uses in daily business. The company may also freely make an agreement with any of its member. It may also be noted that a company may not be considered under law to be an agent to a person who holds all the shares of that company. To set up new company companies house the attributes of a separate legal personality must be known as they are most impactful on case laws of United Kingdom. This article presents different attributes of a separate legal personality for a company register with companies house UK.

Contextual Analysis of the word “Person” 

Generally, it is presumed by the word “Person” that it refers to a company. However, this word may not be limited to a company. The context in which the word “Person” has been used should be analysed clearly. The case of Pharmaceutical Society presents an elaboration for the topic:

Pharmaceutical Society

It was un-allowed to any person under the Pharmacy Act 1868 to auction or keep a retailer shop for poisons unless the person who intended to run this business had a qualification of and got done his registration as a pharmaceutical chemist. The company that was fighting for justice had been accused and taken to the court for violating the laws of the Pharmacy Act 1868. However, the company actually had a superintendent for the auction of chemicals and the superintendent was a registered chemist. Moreover, he was also an employee of the company and given monthly salary and held minor shares in the company. The company was set free from charge by the House of Lords which stated that there was no violation of the laws done by the company.

Lord BlackBurn held:

  • The word person may refer to both, a genuine person, that is an individual, and an artificial person, that is a company. I believe that unless any contradictory statement is mentioned in the Act of Parliament, the term should be assumed to include human being and corporation.
  • In common language, the term person may always refer to a human being and not the company. If anyone is asked that who is the richest person of the United Kingdom, the person being asked will never say the name of any corporation in answer. It is a basic fact that in common terminology, person would mean a genuine person. And technically it may give a reference to a corporation. The context and the subject matter must be analysed to know about the meaning of the word person when any particular Act is using it.
  • I do not support the view that any presumption that the word person does not include a corporation is strong. It will be determined by the circumstances that in what terms the Act of Parliament is using the word person.
  • I conclude that in this case, the term person used in the Act does not refer to a corporation and there is no such goal of the statute that shows that it is a necessity to use the word in a sense that was not intended by those using it in the legislation. I also do not think that the legislature in any terms meant corporation by the word person.
  • It is stated in the preamble of the Act that it is safe for the benefit of the public that the persons running shops for the retail, auction and storing of chemicals and poisons are competent and have enough knowledge of the business they run. Hence, it is evident that the term does not relate to any corporate body, as it is not possible for any corporate body to keep the knowledge about the business it runs whereas the same can be possibly done by the directors, members and other employees of the company. Being a metaphysical body, a company cannot possess knowledge, nor can it be termed as a chemist or a druggist.
  • A corporation may setup a shop and the business being conducted will remain valid as long as the shop is being superintended by qualified persons.

Consequences of BlackBurn’s views

In the case discussed above, the views given by Lord BlackBurn were related to the interpretation of the statute. However, his views assisted in providing guidance about different documents’ development. As in Re Jeffcock, in this case a company, that was limited, had been entitled as a person regarding an authority to willingly confer leasehold.

Some other Contexts of “Person”

The courts have allowed the companies to be considered as a person of full age in context to the Law of Property Act 1925 and at the same time prevented the companies from being termed as persons regarding the exercise of responsibilities of nobility and religion in a true manner. In the case of Winkworth, Lord Templeman had stated that a company could be termed as a person having a conscience.

Shameless Conduct

In the courts of Scotland, it has been clearly stated that a company cannot possess any shame and hence, cannot be accused of as having conducted a shameless act. For instance, in Dean v John. However, a company may own a repute and may sue for the purpose of defamation. As in the cases of D and L Caterers and Jackson v D’Ajou.

Privacy of a Company

A corporate body is also given an authority to protect the company’s privacy from getting harmed. As in the case of R v Broadcasting. However, a company is not allowed any compensation for any unfair accusation on a criminal charge. As in the case of R v Secretary of State.

Affirmation of Verdict of Pharmaceutical Society Case by Interpretation Act 1978

It has been mentioned in the 5th Section and 1st Schedule of the Interpretation Act 1978, that as long as there is no contradictory meaning for the word “person” in any Act, the word refers to a structure of individuals or persons whether incorporated or unincorporated. The legislators regularly differentiate between the two contexts of the word “person” that includes a corporation and the word “individual” that does not include a corporate body.  In the Company Directors Disqualification Act 1986 and in the 5th part of Criminal Justice Act 1993, the terms person and individual have been used respectively. Hence, the former Act allows the company to be disqualified from acting as director whereas the latter does not allow the conviction of a company for insider dealing.

Nationality of a Company 

For a company registration United Kingdom, as a separate legal personality, a company may also be a national to any member state. The nationality may be determined by the state where the company has its main office registered. And the nationality of the company remains the same throughout its existence. Hence, after the task of company registration United Kingdom, the company is assigned a nationality. And that company is termed to be a national of the United Kingdom, thus following all the laws of companies given by the United Kingdom. For further elaboration, consider the case of Kuenigl. The question under consideration was that to register company UK non resident especially when the non-resident members of UK live in an enemy state makes the company a non-national of England or not.

Kuenigl Case

The case involves immaterial and unimportant facts. It was held by Lord McNair J in reference to Daimler that:

  • In the speeches given by Lord Simon and Lord Wright, there is no consideration of the question that can a company that is termed as an enemy because it is under the control of nationals of enemy state be stopped from being be regarded as an English company and stopped from being subjected to the laws of England?
  • According to my knowledge, there is no authority that directly provides a remedy to the matter. However, any power regarding it in my views gives a negative answer to the question.
  • Enemy character does not replace the character of any corporate body. It simply adds some attributes to the current character of the company. If any company registered in England has been given the title of enemy, it will still remain an English company and will obey the rules of England under the Companies Acts.
  • It does not seem reasonable that if an enemy character is associated with a company registered under English laws, it will be allowed to take actions that are generally not allowed under the English to any company of England whose character is free from the charge of enemy character.
  • I think that the nationality of a company is determined by the state under whose law it gets registered as a personality.

Domicile of a Company

As discussed above, an attribute of separate legal personality is that the company holds a nationality determined by its state of registration. Another interesting point is that a company has the capacity to own a domicile as well. The domicile is also determined in the same manner as the nationality. That means, the company may have a domicile as the state where the office of that company has been registered. the domicile of the company does not change throughout the existence of a company. As an example, consider the case of Gasque.

Gasque Case

The case has facts that are immaterial. It was held by Macnaghten J that:

  • The question that has been raised by the appeal of this case is that does the MD Company Ltd own a personal residency or is domiciled out of the UK under the context of that section.
  • As per the suggestion given by Mr. Needham, on part of the party that had appealed, the law of England does not give any domicile to the body of corporate.
  • It is quite fair that a corporate cannot own a domicile just as any individual, similar to the way a corporate body can own a residency just like an individual. However, a natural person may enjoy the attributes of a domicile, residency and nationality. I believe, the law of England gives the same attributes to a body of corporate.
  • There is nothing to argue in the matter that any corporation that is registered under the Companies Acts own the nationality of England. However, a natural person can change its nationality where as a corporate body cannot.
  • Therefore, I believe, a company also holds a domicile, which may be English if the company has registered its main office in England, it may have a Scottish domicile when registered in Scotland. The company’s domicile remains the same from its formation throughout its existence.

The Domicile of Societas Europaea 

An SE has the permission to change its domicile within the European Union willingly. The 14th Directive of Company as outlined by the commission would allow all the companies under the EU to move freely in different states of the Union in the same way as an SE. So when person register company UK non resident he can change the domicile of the company as long as the United Kingdom remains a part of the EU.

Hence, it is clear that as a separate legal personality a company, will be considered as a national of the United Kingdom even when its members are non-residents of UK. As the domicile, as well as the nationality, are determined by state of registration of a company.

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