Thursday, December 5, 2019

Exercise Rights of Incorporated Employers †

Question: Discuss about the Exercise Rights of Incorporated Employers. Answer: Introduction: Separate corporate personality is the main theme of the case and it is advisory in nature. The principle was held in the case of the Saloman v Saloman (Saloman v Saloman Co Ltd. [1897] AC 22). It was held that the shareholders of an insolvent company could not personally be liable for the outstanding debts of the company. Status of the company could not be harmed at any way (Bainbridge 2013). The court has observed that where the moral principle of the corporation is involved, court may pierce the corporate veil. Alan is thereby advised to point out the moral dilemma, if any, present in the incorporation of the company. it is also stated by the court that if the company is established to defraud the others, this doctrine can be applied. Alan is advised not to adopt any fraud purpose. The necessary provision has been mentioned in the case of Gilford Motor Company v Horne. In DHN Food Products Ltd. v Tower Hamlets, court has decided that if the nature of the company depicts similar economic entity than the principle could be applied. Alan is advised to analyse the economic entity of his company. In the light of the decision held in Saloman v Saloman [1897], it can be said that Alan could get the benefit under the doctrine of separate corporate personality (Lo 2017) if not all the previous stated provisions are match up. It is a fact that he is not the director or the shareholder of the company. Therefore, it can be advised that the officials could not stop him trading or prove the illegality of the new company. Reference: Allen, W.T. and Kraakman, R., 2016.Commentaries and cases on the law of business organization. Wolters Kluwer law business. Bainbridge, S.M., 2013. Using Reverse Veil Piercing to Vindicate the Free Exercise Rights of Incorporated Employers. Hopkins, B.R., 2017.Starting and managing a nonprofit organization: A legal guide. John Wiley Sons. Kraakman, R., Hansmann, H., Hertig, G., Kanda, H. and Pargendler, M., 2017.The anatomy of corporate law: a comparative and functional approach. Oxford University Press. Lo, S.H., 2017. Piercing of the corporate veil for evasion of tort obligations.Common Law World Review,46(1), pp.42-60. Saloman v Saloman Co Ltd. [1897] AC 22.

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