SEPARATE Consequences of
the Separate Legal Personality
Perpetual Succession ·
UnderC
&
·
·
Company can enter contracts personality
PERSONALITY ·
Company can sue/be sued where dire
Is the main reason
why someone Company property abuse the
·
can own
would incorporate. It makes ·
Shareholders only liable for amount of
the
entity
a separate from
entity investmest (not all debts)
the shareholders and members,
once the corporation is
registered Cases:
Solomon v Solomon
Lee Lee's Air
Farming Ltd
Battle Irish Art Promotions Centre Limited The exc
·
v
a
company
It is
recognised the advantages Can be
disregarded in 2 ways or imprope
of
such a for the 1. Legislation automatic and used to enforce the established
company
to provisions company law
of
economy encouraging people
take risks,
avoiding bankruptcy 2. Court
discretionary
and used the following .
To es
.
in
and
making borrowing easier circumstances:
company
1.
11.
To avoid
Fraud
a
legal obligation
3 Liabilitie
Can the veil be pierced? the
of
III.
Residency company
Depending on the conduct of iv.
Agreement Separate
·
the directors, the line between
legal v. Pursuant to the agency/alter ego principle voluntarily
blurred
entity and human
entity is vi. Where companies constitute a
"single parent com
such that the human controlling economic entity" debts of s
the can't avail of
the
company
protection. Cases:
In such cases of
improper D HN
conduct, the of
privileges
incorporation do not apply and
·
This exception was first development in Jones
the court will consider ifthey England in circumstances that proved favourable Gilfor
should
disregard the separate legal to the parent company seeking to avail of
personality courts are reluctant compensation for
property held by its subsidiary
to disregard this protection
the Separate Legal Personality
Perpetual Succession ·
UnderC
&
·
·
Company can enter contracts personality
PERSONALITY ·
Company can sue/be sued where dire
Is the main reason
why someone Company property abuse the
·
can own
would incorporate. It makes ·
Shareholders only liable for amount of
the
entity
a separate from
entity investmest (not all debts)
the shareholders and members,
once the corporation is
registered Cases:
Solomon v Solomon
Lee Lee's Air
Farming Ltd
Battle Irish Art Promotions Centre Limited The exc
·
v
a
company
It is
recognised the advantages Can be
disregarded in 2 ways or imprope
of
such a for the 1. Legislation automatic and used to enforce the established
company
to provisions company law
of
economy encouraging people
take risks,
avoiding bankruptcy 2. Court
discretionary
and used the following .
To es
.
in
and
making borrowing easier circumstances:
company
1.
11.
To avoid
Fraud
a
legal obligation
3 Liabilitie
Can the veil be pierced? the
of
III.
Residency company
Depending on the conduct of iv.
Agreement Separate
·
the directors, the line between
legal v. Pursuant to the agency/alter ego principle voluntarily
blurred
entity and human
entity is vi. Where companies constitute a
"single parent com
such that the human controlling economic entity" debts of s
the can't avail of
the
company
protection. Cases:
In such cases of
improper D HN
conduct, the of
privileges
incorporation do not apply and
·
This exception was first development in Jones
the court will consider ifthey England in circumstances that proved favourable Gilfor
should
disregard the separate legal to the parent company seeking to avail of
personality courts are reluctant compensation for
property held by its subsidiary
to disregard this protection
