Lifting the corporate veil free essay sample

The recognition that a company is a separate legal entity distinct from its shareholders is often expressed as the â€Å"veil of incorporation†. General principle, once a company is incorporated, the courts usually do not look behind the veil to inquire why the company was or who really controls it. However in certain situations, the court will ignore the separate legal personality of a company and look to the members/controllers of the company is â€Å"lifting the veil†. This would involve treating the right or liabilities or activities of the company as the rights or liabilities or activities of its shareholders, for example treating the business od a company as that of its principal shareholder. Lifting the corporate veil is something expressly authorised by statute (statutory exceptions) and something it is adopted by the courts (judicial exception). STATUTORY EXCEPTIONS -When members become less than 2. Companies Act 1956 states that â€Å"if at any remaining member has 6 months to find another member, after which the court will lift the corporate veil and hold the sole member liable for all debts of the company† Exceptions in this case: (a) If the sole member was not aware that he was the only remaining member; or (b) The sole member is a holding company owning the entire shares of the company concerned (a wholly owned company). We will write a custom essay sample on Lifting the corporate veil or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page If an officer of a company signs or issue or authorises the signing or issuance of certain instruments on behalf of the company, on which the company’s name does not appear properly -Section 121(2) Companies Act 1956 states that â€Å"such officer will be personally liable† The name of the company must appear in letters on all bill of exchange, promissory notes, cheques, negotiable instrument, endorsements and orders. If the name of the company is not properly mentioned on any of these documents, the person who signed or issued the document is liable to the holder of the document for the amount due, unless the company pays upon the instrument. -If the company carries on its business for a fraudulent purpose: Section 304(1) and (5) Companies Act 1956 states that â€Å"where any business of the company has been carried put with intent to defraud creditor of the company, the court may make the persons who were knowingly a party to the fraudulent trading may be personally liable for debt or other liabilities of the company†. At the time when a debt is contracted on behalf of a company, the officer of the company had no reasonable expectation that the company would be able to pay the debt: Section 303 (3) and 304(2) Companies Act 1956 states that â€Å"such officer will be personally liable†. In other word, that officer may be guilty of an offence and on conviction, he may be liable to pay of the whole or any part of the debt so contracted. -Transactions by a company which have the effect of avoiding or evading tax: Section 140(1) o Companies Act the Income Tax Act 1967 states that â€Å"give the right the Director-General of Inland Revenue to lift the corporate veil†

Free Essays on 1954

In the year 1954, the United States was changing rapidly. President Eisenhower, a Republican, was in the midst of his first term. Eisenhower had just announced to the world that the United States had in fact developed and successfully tested the first hydrogen bomb some two years prior. Mamie Eisenhower christened the Nautilus, which was the first submarine to run on nuclear power. The great court decision, â€Å"Brown vs. the Board of Education,† called for the integration of the country’s public schools. Arkansas and Alabama refused to integrate and President Eisenhower was forced to send the 101st Airborne Division to integrate the schools of these states. The phrase â€Å"Under God† was added to the Pledge of Allegiance. Eighteen-year olds were shouting, â€Å"If we are old enough to fight and die for our country, why can’t we vote?† The teens got a bill into the house but it was turned away by the senate. New fashions were surfacing in both men’s and women’s fashions. Men were wearing Bermuda pants, baggy pants that were cut off at the knee, while women were wearing capris, tight pants that cut off just below the knee. Men were wearing tailored jackets and making a slight move towards the casual dress of today’s workplace. Women were wearing natural shoulders as opposed to the heavily padded ones of the war years. Flat, neck-hugging collars replaced the mannish collars of the late 1940’s. Waists were tightly fitted and skirts were long (Melinkoff 46). The jeans of the time were often lined with plaid flanel and dungarees were worn to the most casual occasions. The sandals of the fifties were not much different than the sandals of today. In the entertainment world, On the Waterfront won the Oscar for the best film while its star Marlon Brando won the Oscar for best actor. Grace Kelly won best actress for her role in The Country Girl. James Dean and Humphrey Bogart were also creating memorable movies. Almost thirty milli... Free Essays on 1954 Free Essays on 1954 In the year 1954, the United States was changing rapidly. President Eisenhower, a Republican, was in the midst of his first term. Eisenhower had just announced to the world that the United States had in fact developed and successfully tested the first hydrogen bomb some two years prior. Mamie Eisenhower christened the Nautilus, which was the first submarine to run on nuclear power. The great court decision, â€Å"Brown vs. the Board of Education,† called for the integration of the country’s public schools. Arkansas and Alabama refused to integrate and President Eisenhower was forced to send the 101st Airborne Division to integrate the schools of these states. The phrase â€Å"Under God† was added to the Pledge of Allegiance. Eighteen-year olds were shouting, â€Å"If we are old enough to fight and die for our country, why can’t we vote?† The teens got a bill into the house but it was turned away by the senate. New fashions were surfacing in both men’s and women’s fashions. Men were wearing Bermuda pants, baggy pants that were cut off at the knee, while women were wearing capris, tight pants that cut off just below the knee. Men were wearing tailored jackets and making a slight move towards the casual dress of today’s workplace. Women were wearing natural shoulders as opposed to the heavily padded ones of the war years. Flat, neck-hugging collars replaced the mannish collars of the late 1940’s. Waists were tightly fitted and skirts were long (Melinkoff 46). The jeans of the time were often lined with plaid flanel and dungarees were worn to the most casual occasions. The sandals of the fifties were not much different than the sandals of today. In the entertainment world, On the Waterfront won the Oscar for the best film while its star Marlon Brando won the Oscar for best actor. Grace Kelly won best actress for her role in The Country Girl. James Dean and Humphrey Bogart were also creating memorable movies. Almost thirty milli...