Law of corporate governance question ( Criminalising corporate Essay

Law of corporate governance question ( Criminalising corporate governance failures is a step too far. Discuss ) - Essay ExampleTo begin with, it was established in Salomon v. Salomon and Co. Ltd that a registered tum is a legal person, separate from its members. This principle may be referred to as the bedim of the incorporation. Therefore, the law allow not evade this rule and go behind the separate personality of the corporation to the members.1 So legion(predicate) reason exist for corporate officials to hind behind the suppress2 one which is to commit fraud, an otherwise many be to confuse and conceal3 But there are exceptions to the rule in Salomons causal agency where the veil is lifted, or pieced and the law disregards the corporate entity and pays regards instead to the scotch realities behind the legal facade, that is, where the facts supersede form. The exceptions should only be classified between those provided by statute and those provided by law4 Why must the cou rts lift the veil of the corporation? The sole reason is because maintaining it will cause many problems to criminalize corporate governance failure. ... e personality to the individual members or ignores the separate personality of each company in favour of the economic entity constituted by a pigeonholing of associated companies6 The courts have adopted a more extrapolate attack based of the interest of justice as being the guiding light. Thus, Lord Denning M. R was hustling to lift the veil in Wallersteiner v. Moir7. Instead of relying in the interest of justice approach, the Court of apostrophize in Adams v. Cape Industries plc8 had applied the test as stated by Lord Keith in Woolfson v. Strathclyde Regional Council9 that the veil would only be pieced where special circumstances exist indicating that it is a mare facade concealing the true(p) facts. Therefore, there must be some improprietory before a veil can be lifted10 such as fraudulent trading11 or wrongful trading12 . Instead of relying in the interest of justice approach, the Court of Appeal in the Adams case had applied the test as stated by Lord Reid in the sparing case of Woolfson v. Strathclyde Regional Council above, that the veil would only be pieced where special circumstances exist indicating that there is a mere facade concealing the true facts. The case, like Adams concerned the issue as to whether a group of companies ought to be looked upon as a single company for the purposes of instituting legal proceedings. The courts position is hence even becoming clearer. There must and forever be some evidence of imporprietory. On the other hand, where the existence of some improprietory cannot be established, the courts will never lift the veil. Therefore, and in such cases, the company cannot be criminalized. This approach was taken by Toulson J in Yukong Line Ltd v. Rendsburg Investment Corporation13. A similar approach was also taken in the case of Ord v.