Quizlet Company Law Study online at quizlet . com/_5ep4yz 1. Adams v held the law recognises the creation of Cape subsidiary companies and they will generally Industries be treated as separate legal entities with all the rights and liabilities that would normally attach to separate legal entities; entities in a group are not responsible for each other's obligations/debts; "where a facade is alleged the motive of the perpetrator is highly material" 2. The Albazero groups of cos- Roskill LJ "each company in a group of companies ... is a separate legal entity"; cannot exercise each other's rights 3. Bhullar v Bhullar directors must avoid any possibility of a conflict of interest, particular relating to corporate opportunities 4 Boston Deep Sea Fishing secret profit; Bowen: "it is contrary to equity that the agent or servant should retain money so received without the knowledge of his master 5. Boulting Denning explained the requirements in s173 6. Chandler v Cape 7. Charterbridge 8. DHN Food v Tower Hamlets BC 9. Dorchester Finance in appropriate circumstances the law may impose direct liability on the parent company (health and safety of subsidiary); Arden- not piercing the veil, parent company had duty of care and breached it objective element of s172: 'whether an intelligent and honest man in the position of a director of the company concerned, could, in the whole of the existing circumstances, have reasonably believed that the transactions were for the benefit of the company' although they were separate companies, they could be regarded as a single economic entity; Denning: "group is virtually the same as a partnership in which all the three companies are partners"; key factors to determining single economic entity were degree of control parent exercised over the activities of subsidiary (e.g. same board of directors) and complete ownership of subsidiary shares by parent (liberal approach in this case has become less popular) the duty of care and skill- a director was required to perform his duties with the skill which could be reasonably expected from a person with his knowledge and experience and to take such care as an ordinary man might be expected to take on his own behalf acting in good faith and the interests of the company 10. Eclairs Group 11. Facia typically a bank will require each subsidiary Footwear company to provide security and guarantees that it will meet its own debts to the bank and the debts of any other company in the unit to the bank, which ensures the bank can ignore the separate legal entities 12. Foss v where a wrong is done to the company, the Harbottle proper claimant is the company 13. Gilford sham/facade- company was set up as Motor v sham/facade to hide intention to break covenant Horne with former employer; abuse of the corporate form 14. Gramsci v confirmed the Prest evasion principle Lembergs 15. Hickman v 1915- though articles of association can neither Kent constitute a contract between a company and an outsider, nor give any individual