Jubilee Cotton Mills v Lewis
Rule established
The Certificate of Incorporation is conclusive evidence that all requirements of the Act have been complied with; cannot be challenged on procedural grounds after issue
Facts
- A company was incorporated.
- Later, it was discovered that one of the subscribers to the memorandum (required minimum 7 for public company) was a minor, technically incapable of subscribing.
- The validity of incorporation was challenged.
Issue
- Whether the Certificate of Incorporation can be challenged on the ground that formation requirements (minimum subscribers) were not properly met.
Held
- The House of Lords held that once the Registrar issues the Certificate of Incorporation, it is conclusive evidence that all requirements of the Act have been complied with. The certificate cannot be challenged even if technical defects in formation are later discovered. The company is validly incorporated from the date on the certificate.
Ratio Decidendi
The Certificate of Incorporation is conclusive, not merely prima facie evidence. Technical defects in formation documents cannot challenge the company's existence after the certificate is issued. This protects commercial certainty: every contract entered by the company since incorporation would otherwise be uncertain. Exception: only fraud in obtaining incorporation (S.7(7)) can challenge the certificate.
How to use it in an exam
Protects commercial certainty. If incorporation could be challenged years later for technical defects, every contract and transaction since incorporation would become uncertain. The conclusiveness rule ensures that once born, the company's existence is beyond challenge (except fraud).
Source
Source: [1924] Appeal Cases 958
This is an educational summary, not the judgment itself. Cite the reported version in professional or academic work.