Question

In relation to the legal rule in Macaura v Northern Assurance Co Ltd, select the most accurate statement

Select one:

1.Companies enjoy corporate capacity

2.None of these statements are correct

3.Court will lift the corporate veil if fraud is suspected

4.Companies (which includes the company directors) are legally separate from the shareholders by the corporate veil

5.All of these statements are correct

Answer 1

2.none of these statements are correct.

working;

In this case the Macaura owns all the shares of Irish Canadian Sawmills Ltd.

This company owns the timber, which got destroyed in a fire.

Macaura insured the timber against fire peril on his own name, instead of company's name.

The insurance company denied insurance claim stating that it was not done in the name of company.

Macura filed a case in the court.

Court in its decision made it clear the Macaura and company are two separate legal entities and timber should have been insured in the name of Irish Canadian Sawmill ltd, failing which the claim cannot be settled.