oa Comparative and International Law Journal of Southern Africa - The new company, asset financing security and the law in Malawi
The object of this article is two-fold. First, assuming that on the facts of this case there was doubt as to who was the grantor of the controversial bill of sale, to discuss how contractual rights may be transferred from one person to another. This question is important because it helps establish whether the bill of sale was enforceable against Label Industries Ltd. If it was, the application of section 23 to the case was justified. For, as is shown more fully in the article, this provision applies to a 'debenture or charge created' by an incorporated body and 'secured upon the capital, stock, goods etc of such incorporated body'. Second, the article questions whether the court's interpretation of section 23 is correct and makes commercial sense. It is argued that company law allows transfer of benefits and obligations of a pre-incorporation asset financing agreement to the intended company after the company's incorporation. Obviously this would be a pointless exercise if the agreement were thereafter to be unenforceable by or against the company. That makes commercial sense as not all companies have real property which can be put up as security for such finance.
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