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Problem:
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.
Additional Requirement:
The question belongs to Law and it discusses regarding the separation of company from its owners and discusses regarding limited company and going concern concepts.
Word Limit: 249 Words
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