THE COMPANY, ITS CAPITAL AND INSOLVENCY

There is a fundamental link between the economy and companies operating within its ambit. Companies will only stand a chance of success where there is access to capital that is required to conduct their businesses. The term capital is used here in the sense of liquidity or cash flow as opposed to its technical usage in other aspects of the law of finance such as capital adequacy requirements under the Basel regulatory frameworks.1 Where this capital is out of reach, or comes at a high cost, companies could struggle to survive and grow with a resulting negative impact on the economy. The benefits of the corporate form,2 which Salomon v Salomon amplified,3 come at the cost of an acute dependency by the economy on companies. The reason for this is trite: limited companies have become the principal unit of commercial life for more than a century.4 Indeed, companies have a significant impact on the livelihood of stakeholders like creditors, employees, customers and equity investors.5 Many persons (natural and juristic) will fall into one or more of these