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Ability to incur its own liability

By muhdizz27 | Updated: June 17, 2024, 1:52 p.m.

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_abc Powtoon Transcript

Hi. I am izz. 
Ability to incur 
its own liability

The liability of a company is unlimitedLiability of members is limited, and depends on the type of company

There are two cases:
Re Application of Yee Yut Ee [1978] 2 MLJ 142Saloman v A Saloman & Co Ltd [1897] AC 22

Re Application of Yee Yut Ee 
[1978] 2 MLJ 142
Facts:   Yee was a   secretary of a   company.   The company retrenched its staff and matters concerning retrenchment benefits were referred to the industrial Arbitration Court, which ordered an award.  Meanwhile,   Yee was appointed as a director and when the company failed to comply with the award, an action was made against Yee.

Held: It is a cardinal principle of company law that except in cases of fraud, breach of warranty of authority, and other exceptional circumstances, a director is not liable for the debts of an incorporated company. Nothing in the Companies Act  (Cap.185) makes a director personally liable for the company's debts.   Nor was there anything in the Industrial   Relations   Act   (Cap.   124)   which modifies this fundamental doctrine of company law.
I will take an action against you 
because your company 
failed to comply with the award
Re Application of Yee Yut Ee 
Lawyer
Yee Yut Ee

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