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†

Political theories of Hobbes and Locke essays

Political theories of Hobbes and Locke essays The Political Theories of Hobbes and Locke In the sixteenth century, the rise of the state and decline of the feudal system brought about the question of authority, whose is absolute, God or man? Should the state have power over its subjects or the subjects over the state? Soon after the theory of sovereignty and the theory of social contract were developed, but even these still drew debate. Thomas Hobbes and John Lockes political theories have been influential ever since they were first developed in the late seventeenth century. During this time there was an outpouring of political ideas, Locke and Hobbess theories stand out. Their theories are both psychologically insightful, but in nature, they are drastically different. Although they lived in the same time frame, their ideas were derived from different events happening during this time. Hobbes drew his ideas on man from observation, during a time of civil strife in Europe during the 1640s and 1650s. Locke drew his ideas from a time where Hobbes did not have the chance to observe, the glorious revolution. At the time of the exclusion crisis in England, Hobbes was either dying or dead. These two time periods are very influential in the development of these two mens ideas. As you will see, Hobbes developed a pessimistic view on man from his dreary and bleak surroundings while Locke developed an optimistic outlook on man from his eventful and promising times. Thomas Hobbess greatest work was Leviathan. In this Hobbes stated that people by nature are selfish and ambitious. He concluded that the only way to restrain mans natural aggression is by implementing an absolute power, whose main objective is to keep his subjects in line. In this form of government, the subject surrender all rights to the state so that it is best equipped to keep peace any way necessary. This idea is essential for the transition from mans nat...

Core Competence of Sharp Corporation Essay Example | Topics and Well Written Essays - 3000 words

Core Competence of Sharp Corporation - Essay Example From this paper it is clear that there were abundant literatures providing theoretical and empirical support justifying that competitive advantage is derived from imperfectly tradable, imperfectly substitutable and valuable assets. The idea of portfolio approach encouraging diversification into unrelated areas that flourished in 1960s and 1970s lost its fervor to RBV approach advocating diversification into related areas. RBV approach also was critical of multi divisonalisation of a large company that led to corporate fragmentation and short-termism undermining the development of core competencies and innovations. Core competency exploitation led to vertical integration in large companies to achieve competitive advantage. But of late vertical disintegration is being attempted in the globalization tendencies which offer wide opportunities to delegate to external suppliers with highly specialized expertise resulting in more pronounced core competency approach for the given company. As the paper highlights Hammel and Prahalad in their book â€Å"Competing for the future†assert that companies should look forward to the share of future opportunity share rather than current market share. They say that successful enterprises will reshape their industries rather than themselves by building upon their unique core competencies without building upon current product lines and that this will lead to creation of new competencies. They advocate new strategy which requires four approaches namelyunderstanding of the shape of future competition; process by which to gauge tomorrow’s opportunities; energizing the company from top-to-bottom to prepare for the future; and   overtaking the competitors and arrive at the future first without assuming undue risks.