Piercing the Corporate Veil
Since the establishment in Salomon v Salomon, the separate legal
personality has been long recognised in English law for centuries,
that is to say, a limited liability company has its own legal identity
distinct from its shareholders or directors. However, in certain
circumstances the courts may be prepared to look behind the company at
the actions of the directors and shareholders. This is known as
"piercing the corporate veil".
There are numerous cases concerning the "piercing the corporate veil",
among which, Jones v Lipman[1] was a typical case. Lipman sold land to
Jones by a written contract but refused to complete the sale because
of another good deal, instead he offered damages for breach of
contract. To put the house out of reach of Jones, he bought a company
"off the shelf" and conveyed the house to it. In an action against
Lipman and the company, the court granted the specific performance and
ruled that "the defendant company is the creature of the first
defendant, a device and ...
Facts of the Case: Darleen Suggs started working and helped maintain the produce business with the decedent, Junior Earl Norris, from 1973 until his death in 1983. During this time and according to several witnesses, the plaintiff did most of the farm work, as well as drive to markets 60 miles away, without aid of the decedent. She also handled all finances and deposited them into their joint bank account, giving her the reason to believe they had an implied contract that she was a partner and would receive one-half of the profits. In
The real dispute about the plaintiffs’ rights was focused on whether the fraud exception to the protection afforded to the registered proprietor by s. 184(3)(b) of the Land Title Act had been enlivened by the conduct of Mr Lacy and Mrs Capper as the plaintiffs’ admitted agents or by that of Mr Sultan. On the factual findings I have made, Mr Sultan has not been shown to have acted fraudulently nor to have been the plaintiffs’ agent.
Sam Dillion wrote “What Corporate America Can’t Build: A Sentence” for an audience of college students, employees and corporate people. In his article, Sam points out that companies are spending a lot of money annually on remedial training. According to Sam, the writing problem appears in e-mails, reports and texts. He is informing his audience to brush up on writing skills before entering the corporate world, in order to avoid remedial training. Companies like to hire employees with excellent writing skills but many of employees and applicants fall short of that standard.
Jones was party to the contract and mortgage together with Mrs Jones as surety for her husband, even though Mrs Jones was the actual owner of the property. This produced a legal consequence as it affected the appellants with a conduct on the part of the husband in relation to his wife which raised equities in her favour against the indication of a mortgage. The husband exercised undue influence on Mrs Jones to procure her signature to the mortgage which consisted of no consideration. The plaintiff brought proceedings against the defendant upon a contract to pay interest and principal contained in the mortgage over the property at Walkerville owned by Mrs Jones. It was understood that Mrs Jones executed the mortgage without understanding the effect of the contract and presumed various false misrepresentations. She argued that the mortgage which she s...
At first glance, it seems implausible the word democracy isn't written in the United States Constitution, or in the Preamble of the Constitution, or even in the Declaration of Independence. One would assume a concept so paramount to modern American culture would surely be derived from one of its oldest and most endeared documents. Alas, it is not. The Constitution only specifically mentions two entities, the government and “We the People”. Defining government is an easy enough task, but who are “We the People”? Originally consisting of only white male property owners, eventually adding in other races, income classes, women, and astonishingly, corporations, the definition of “We the People” has evolved numerous times. Corporation is another key term the architects of our government failed to define for us, perhaps that is why it found its way into the phrase “We the People”. A grave dilemma lies in this fallible defining of terms. Granting corporations person-hood legislatively shifts the power of democracy from human interests to corporate interests. This corrosion of human interest can clearly be noted when examining the battle over corporate power highlighted in the court cases of Sebelius v. Hobby Lobby, Citizens United v. Federal Election Commission, and United States v. Sourapas and Crest Beverage Company.
According to Mallor, Barnes, Bowers, & Langvardt (2010) “modern corporation law emerged only in the last 200 years, ancestors of the modern corporation existed in the times of Hammurabi, ancient Greece, and the Roman Empire. As early as 1248 in France, privileges of incorporation were given to mercantile ventures to encourage investment for the benefit of society. In England, the corporate form was used extensively before the 16th century. In the late 18th century, general incorporation statutes emerged in the United States” (p. 1009).
According to Corporation Act 2001 s124(1), it illustrates that ‘’A company has the legal capacity and powers of an individual both in and outside the jurisdiction” . As it were, company as a legal individual must be freely with all its capital contribution shall embrace liability for its legal actions and obligations of the company’s shareholders is limited to its investment to the company. This ‘separate legal entity’ principle was established in the case of Salomon v Salomon & Co Ltd [1987] as company was held to have conducted the business as a legal person and separate from its members. It demonstrated that the debt of company is belonged to the company but not to the shareholders. Shareholders have only right to participate in managing but not in sharing the company property. Besides ,the Macaura v Northern Assurance Co Ltd [1925] demonstrates that the distinction between the shareholders and company assets. It means that even Mr Macaura owned almost all the shares in the company, he had no insurable interest in the company’s asset. The other recent case is the Lee v Lee’s Air Farming Ltd [1961] which illustrates that the distinct legal entities between employee ad director allows Mr.Lee function in dual capacities. It resulted that the corporation can contract with the controlling member of the corporation.
Today, it is generally perceived by the public that the single and sole objective of corporations is to maximize profits (Bartlett, 2015), reflected in President Bill Clinton’s radio address in 1996 during which he stated “the most fundamental responsibility for any business is to make a profit”. This belief could be substantiated by the statistic that the profit margins of American corporations have risen from the 1980s to 2008 (Blodget, 2012), shown by the increase in nominal GDP of the United States over the period (Yardeni, Johnson, 2016). Given the above, it could be deduced that most businesses do indeed have a single objective of profit maximization and therefore tend to pursue short-term gains at the expense of all other considerations.
Wall Street’s takeover of the Obama cabinet is now complete. Officially it started on Jan. 32, 2010, on that day the Supreme Court ruled that the government may not ban corporations from political spending on elections. Thus opening the floodgates allowing for corporations to use their vast treasuries to overwhelm elections and intimidate officials into doing their bidding.
A registered company, as an artificial person is separate from its members and exists only by virtue of the Companies Act under which it is incorporated. When a business is incorporated, it becomes a separate legal entity and, therefore, can be sued and sue without affecting the shareholders personal assets. This was established in “Salomon v A Salomon Co.Ltd”. Separate legal personality is known as the veil of Incorporation. This protects the shareholder and places the responsibility of the company onto the directors. These duties are outlined in the Companies act 2014.
evidence to show that the company was in fact acting as an agent in a
The Principle of Separate Corporate Personality The principle of separate corporate personality has been firmly established in the common law since the decision in the case of Salomon v Salomon & Co Ltd[1], whereby a corporation has a separate legal personality, rights and obligations totally distinct from those of its shareholders. Legislation and courts nevertheless sometimes "pierce the corporate veil" so as to hold the shareholders personally liable for the liabilities of the corporation. Courts may also "lift the corporate veil", in the conflict of laws in order to determine who actually controls the corporation, and thus to ascertain the corporation's true contacts, and closest and most real connection. Throughout the course of this assignment I will begin by explaining the concept of legal personality and describe the veil of incorporation. I will give examples of when the veil of incorporation can be lifted by the courts and statuary provisions such as s.24 CA 1985 and incorporate the varying views of judges as to when the veil can be lifted.
Similar things happened in the case Hendon vs. Adelman[6] where signatory directors were held personally liable for stating company’s name on a signed cheque as “L R Agencies Ltd” while the original name was “L & R Agencies Ltd.”
In this section of the report, I will be discussing the meaning of corporate citizenship. I will be explaining how companies can be considered good corporate citizens and taking into thought Corporate Accountability, Corporate Governance and the 3 Pillars of Sustainability, and why companies would need to change the audit model.
The XYZ Corporation was established in 2004 and their main office is located in Vancouver, BC. The company’s main objective is to create new innovating technology for media devices, computers, and digital music players. They deal with the design, manufacturing and marketing of the products. XYZ Corporation has been providing Canadians with groundbreaking technology throughout the years and continues to create new technology to provide others with top-level technology. Although, recently their success rate has appeared to drop rapidly due to a number of factors that will be explored throughout this case study. Their main objective is to target the problems so that they can work towards having the issues resolved as quickly as possible. If they do not take any course of action, the state of the company may be in extreme danger. This case study is designed to explore the areas of the company and discover the problems blocking the XYZ Corporation from success.