1)the doctrine of incorporation and its exceptions 2)the division of powers between the Board of directors and the General Meeting

Essay by johny82University, Bachelor'sB, February 2009

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A business company once created and will gain a legal personality, a juristic body, detach and different from its members and shareholders, and able of having its own rights, duties and obligation and be able to sue or be sued in its own name. This is usually referred to as the doctrine or principle of corporate personality and it carries with it the idea of limited liability which generally runs from the above mentioned doctrine of corporate personality. No case illustrated the above values better than the noted House of Lords decision in Salomon v. Salomon but, in some status, the courts have interfered to discount or disregard the doctrine of corporate personality and limited liability particularly in involving with group of business companies and auxiliaries and where the corporate form is being used as a barrage to commit fraud or as a "mere façade concealing the true facts." In this assignment, I will going to discuss the theory of lifting the veil and the conditions where the court may "pierce" or "lift" the veil of integration.[1]Regardless

of many sophisticated efforts in recent years at offering theories which give explanation company law, it is remarkable that we have not yet fully understood the essence of the corporate being. It will be sufficient to say, that if four persons incorporate a business company, then the company will become a fifth person distinct and different from these four persons independently or cooperatively. Yet when a business firm or corporate form is a deception (sham) or a ‘mere façade concealing the true facts,’ the veil of corporate character can be torn sideways. The facts of the case are as follows: Mr Salomon guided a successful sole trade business. Later he transformed into a limited company which it called Salomon and Co. Ltd and...