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Solution Library
Corporate Legal Entity of a Company
Question
Arthurs, Boulez and Coombes were the directors and sole shareholders of Driftwood Products Limited. After several years of hard work and considerable success, all three decided to take a vacation together and leave their office manager in charge of the business while they were away. They flew to the Bahamas for 3 weeks of sun and fishing. While they were away, the manager instructed the company lawyer to sue a debtor who was long overdue in payment of his account. Several days after the action was started, it was learned that all three shareholders had been killed when their fishing boat overturned in a storm. The debtor has suggested defending the action by claiming that the creditor corporation (Driftwood Products Limited) ceased to exist when all three shareholders were killed. Is this correct? Explain the ways in which this contention may be answered.
Summary
The question belongs to Law and it is about a case where three of the shareholders of a company die in an accident not before filing a case against a debtor. The debtor argues that since all the shareholders are dead, the company has seized to exist.
Total Word Count 249
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