Corporate Veil
Introduction
The main concept in the assignment is about corporate personality. First of all, we need to clarify the meaning and characteristics of company. In short, company means a body of persons combined for a common object. A company exist there must be a group of persons that more than 1 persons. In eyes of law, a company is a separate legal personality from its members. In Section 16(5) CA1965, it stated that a body corporate obligations and liabilities are its own, and not those of its participation; it can sue and be sued in its own name; the property is not the property of its participants; and company can enter into a contract.
Whilst, we need to understand the types of Joe’s company belong to. In section 16(4), it stated that company divided into 4 types that are limited by shares, limited by guarantee, limited by guarantee and shares and the last one was unlimited companies. While Joe’s company belongs to company limited by shares, it means that member’s liability is limited to unpaid amount on the shares taken up by them, it stated in section 18(3) CA 1965.
From the whole assignment, we need to identify whether corporate veil can be lifted in the particular situation. So, we need to obtain an understanding what is corporate veil. Corporate veil it can define as separates company from its members, or we can say that legal person (company) separate from its members. Since company is a separate entity with its members, the company has power to hold land, enjoys perpetual succession even the death of one of its member, the company will not dissolve.
Next, we going to identify in what situation corporate veil will be lifted. Lifting the corporate veil it means that separation between company and its participants does not exist anymore. The court will lift the corporate veil when controllers behave some unethical behavior, or controllers concern about their interest much more than other parties’ interest. Corporate veil may be lifted either by the
The main concept in the assignment is about corporate personality. First of all, we need to clarify the meaning and characteristics of company. In short, company means a body of persons combined for a common object. A company exist there must be a group of persons that more than 1 persons. In eyes of law, a company is a separate legal personality from its members. In Section 16(5) CA1965, it stated that a body corporate obligations and liabilities are its own, and not those of its participation; it can sue and be sued in its own name; the property is not the property of its participants; and company can enter into a contract.
Whilst, we need to understand the types of Joe’s company belong to. In section 16(4), it stated that company divided into 4 types that are limited by shares, limited by guarantee, limited by guarantee and shares and the last one was unlimited companies. While Joe’s company belongs to company limited by shares, it means that member’s liability is limited to unpaid amount on the shares taken up by them, it stated in section 18(3) CA 1965.
From the whole assignment, we need to identify whether corporate veil can be lifted in the particular situation. So, we need to obtain an understanding what is corporate veil. Corporate veil it can define as separates company from its members, or we can say that legal person (company) separate from its members. Since company is a separate entity with its members, the company has power to hold land, enjoys perpetual succession even the death of one of its member, the company will not dissolve.
Next, we going to identify in what situation corporate veil will be lifted. Lifting the corporate veil it means that separation between company and its participants does not exist anymore. The court will lift the corporate veil when controllers behave some unethical behavior, or controllers concern about their interest much more than other parties’ interest. Corporate veil may be lifted either by the