Business Law Assignment Solutions

This business law assignment explores two key legal doctrines: the identification doctrine and piercing the corporate veil. It analyzes landmark cases such as Lennard's Carrying Co Ltd v Asiatic Petroleum Co Ltd, Daimler Co Ltd v Continental Tyre and Rubber Co (Great Britain) Ltd, El Ajou v Dollar Land Holdings plc, Salomon v A Salomon & Co Ltd, Adams v Cape Industries plc, Prest v Petrodel Resources Ltd, illustrating their impact on legal responsibility and corporate structures.

Running head: BUSINESS LAW
Business Law
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BUSINESS LAW
Answer 1
Answer 1
The identification doctrine helps us to recognize and point any frauds or wrongs that
are done by a member, officer or Agent of the said organization by laying down principles that
would make the task handier. By what is discussed above, it can be concluded that the ideas and
minds responsible for the working of an organization are the brain of the entity in legal terms,
hence, the doctrine is a theory used to administer the wit and the will of an organization. It was
in the famed Lennard's Carrying Co Ltd v Asiatic Petroleum Co Ltd [1915] AC 705 case that
the doctrine was formulated. It was stated in the court of law that liability can only be inflicted if
any entity from the organisation is involved, when it was questioned if a ship was liable for the
loss of goods if directed on a wrong course.
Daimler Co Ltd v Continental Tyre and Rubber Co (Great Britain) Ltd [1916] 2
AC 307 was a case in which it was very clearly stated by the jury that the company’s residence
can be considered as a place where the minds that work together to administer the company
reside in. El Ajou v Dollar Land Holdings plc [1993] EWCA Civ 4 case became a turning
point as it re-shaped the idea of the doctrine. It was ruled that all people can take command as the
brain and the administrator of a company, hence, the principle that was discussed above was
completely overruled.

2
BUSINESS LAW
Answer 2
Before we discuss the case of Salomon v A Salomon & Co Ltd [1896] UKHL It can
be said that the stockholders are inclined to follow a doctrine that induces them either to lift the
veil in question or simply to pierce the said corporate veil. It is known that a financial institute or
a company is an unrelated and a unique legal entity, not bound by the identities of any other of
its members. Something similar can be said for its losses and liabilities, for it is known that the
company is a separate legal entity so all the losses and liabilities that are inflicted upon it are
subjected to the organization only, not on its members. Hence getting into the above case, the
foundations of the company was based on a fraud. If a company is formed properly, it is bound
to be a totally separate legal entity no matter what; hence the court has the choices to lift or to
pierce, convicting the members of breach of law, though it is quite rare for companies to apply
for such conditions in many countries of the world.
In the Adams v Cape Industries plc [1990] Ch 433 case, the court ruled that
piercing will only be done when the roots of the company are based on a fraud or if a member
applies for an exit. There was a debate on this very topic in the of Prest v Petrodel Resources
Ltd [2013] UKSC 34 case and the same opinion was held up by the court.

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BUSINESS LAW
Bibliography
Adams v Cape Industries plc [1990] Ch 433
Daimler Co Ltd v Continental Tyre and Rubber Co (Great Britain) Ltd [1916] 2 AC 307
El Ajou v Dollar Land Holdings plc [1993] EWCA Civ 4
Lennard's Carrying Co Ltd v Asiatic Petroleum Co Ltd [1915] AC 705
Prest v Petrodel Resources Ltd [2013] UKSC 34
Salomon v A Salomon & Co Ltd [1896] UKHL