15
Introduction
Para 1
I. INTRODUCTION
(1) IN GENERAL
I. Nature of company. The word 'company' imports an association of a num- ber of individuals1 formed for some common purpose2. Such an association may be either incorporated (that is, a body corporate with perpetual succession and a common seal) or unincorporated3. An incorporated company is a legal person separate and distinct from the individual members of the company*, whereas an unincorporated company has no such separate existence and it is not in law an entity distinguishable from its members.
There are many other bodies corporate which, although they may largely or partially engage in trading or comparable activities, are not commonly described as companies. These fall broadly into three categories: (1) those incorporated pur- suant to some general Act of Parliament permitting incorporation to be effected by any body of persons which fulfils certain specified conditions: of these the chief examples are building societies and industrial and provident societies7; (2) those known as public corporations: these are each the creation of a royal charter or, more commonly, a special Act of Parliament which defines the objects, constitu- tions and powers of the corporation; they are created to fulfil in each case some special social or economic purpose; examples include the British Broadcasting Corporation; the British Railways Board9; the British Waterways Board 10; the Cable Authority11; the Independent Broadcasting Authority12; London Regional Transport13; the British Coal Corporation14; and the Port of London Authority 15; and local government corporations 16 also sometimes indulge in quasi-commercial activities; and (3) insurance companies, which, for this purpose, includes any person or body of persons (whether incorporated or not) carrying on insurance business17, the conduct of whose business is regulated by the provisions of the Insurance Companies Act 198218.
I The word usually involves two ideas: (1) that the members of the association are so numerous that it cannot aptly be described as a firm or partnership; and (2) that a member may transfer his interest in the association without the consent of all the other members: see Re Stanley, Tennant v Stanley [1906] 1 Ch 131 at 134 per Buckley J; see also Smith v Anderson (1880) 15 ChD 247 at 273, CA per James LJ. A single individual may, if he wishes, carry on business under the style of 'Such and such Company', but he does not thereby become a 'company' in any sense of the word. However, a person who is not a public company may not use ‘plc'; nor may a person trade or carry on business under a name or title of which 'limited' is the last word unless duly incorporated with limited liability: see para 158 post.
2 The purpose for which they have joined together must be of a more or less permanent character, though in common, as distinguished from legal, parlance the word 'company' is used to describe a number of individuals associated or assembled for a single occasion.
3 Re St James' Club (1852) 2 De GM & G 383 at 389; Re Griffith, Carr v Griffith (1879) 12 Ch D 655- 4 See para 89 post.
5 A company which is neither a corporation nor a partnership is a thing unknown to the common law:
see Lindley's Law of Companies (6th Edn) 2; Macintyre v Connell (1851) 1 Sim NS 225 at 233- 6 See generally BUILDING SOCIETIES.
7 See generally INDUSTRIAL AND PROVIDENT SOCIETIES. It should be noted that such societies are
normally described as 'limited': see the Industrial and Provident Societies Act 1965 s 5(2).
8 The BBC is a body incorporated by royal charter: see TELECOmmunications AND BROADCASTING
vol 45 para 517.
9. See RAILWAYs, inland waterways and pIPE-LINES Vol 38 para 758. 10 See RAILWAYS, INLAND WATERWAYS and pipe-lines vol 38 para 758. 11 See TELECOMMUNICATIONS AND BROADCasting vol 45 para 702.