Commercial Applications of Company Law: A Detailed Report

This report explores key aspects of company law, beginning with the process of company registration in Australia, referencing the NB Form 201 and relevant sections of the Companies Act. It outlines the requirements for registering a media company, including the need for share capital and the specific purpose of news making. The report then delves into the legal concepts of "directing mind and will" and "piercing the corporate veil." The "directing mind and will" concept, also known as the identification doctrine, is explained in relation to corporate liability, with reference to the Tesco Supermarkets Ltd V Nattrass case. "Piercing the corporate veil" is discussed as an exception to the principle of separate legal personality, allowing courts to hold shareholders responsible for corporate actions, as illustrated by the Salomon case. The report emphasizes the importance of these concepts within the Australian legal context and concludes with a list of references.

Subject: commercial applications of company Law Assignment
1 | P a g e

Contents
PART 1: Company Registration:.....................................................................................................3
PART 2:...........................................................................................................................................4
a) Research and Explain the phrase "DIRECTING MIND and WILL"...................................4
(b) Research and Explain the phrase "PIERCING THE CORPORATE VEIL".........................5
References........................................................................................................................................6
2 | P a g e

PART 1: Company Registration:
As far as the decision of registering a new public company in Australia under the NB Form 201
and Sections 117(1) and 117(2) is concerned, the individual will register a media company a
web-portal that would focus on travel and food across the state. It would recruit a limited number
of journalist such as 25 in the number who would be trained to handle the portal and admin at the
same time so that the stories could be written, edited and uploaded in a proper way. According to
the norms, a company could properly register only if it has a share capital and ensures that its
sole purpose is to news making and informing (Barker, 2007).
The company will have to register its name, for example here the portal or online company
would be registered under the name of www. Nomadictummytrail.com and thus will finally
operate under the ACN, or Australian Company Number that is given once the registration
number is generated (Mann, 2013). Section-117 of the Companies Act, 2013, includes a specific
copy of every resolution or the agreement, where it is stated that specific issues are distributed in
the subsection.
Under section 117 resolutions and agreement is to be filed in a proper way. This shall include;
i. A proper copy of the resolution of the agreement in relation to the matters in the
subsection
ii. Includes explanatory statement under the section
Thus, the company has been registered under this head with a special approach and planning. It
is expected that revenue shall be generated in a defined way; however, the turnover has been
planned by identifying three years from the date of registration. Formation of a company is
incomplete without setting a focussed target and plan for business growth and expansion. Hence
the website portal shall involve journalists and encourage them to submit stories on a regular
basis so that the portal is noticeable on the Google and other search engines (Latimer, 2012).
3 | P a g e

Registering the new company under the respective act will help in improving the scopes of
business in a respective country.
PART 2:
a) Research and Explain the phrase "DIRECTING MIND and WILL"
The directing mind and will is a unique concept which is also known as identification doctrine as
well as alter ego principle and describes the abstract concept of a company. Specific
consideration was taken and evaluated under this doctrine. The landmark decision as put forward
by the House of Lords I Tesco Supermarkets Ltd V Nattrass criminal case explained that the
actions were taken to identify criminal liability and finally the corporate liability has been
narrowed. It is under the decision of Lord Reid that directing mind and will test was linked and
the need for recognising living individuals was identified as the “embodiment” of the
organisation. After the case of Tesco, several criticisms affected the decision on directing mind
and will test (Barker, 2007). Later Lord Hoffman explored the category and with the help of a
civil case explained the need for liability in equity for knowing receipt. It was then the Court of
Appeal implemented the directing mind as well as will test to identify the knowledge of the
company chairperson. The individual was not only the chairperson but also played important role
in the management of the company. However, he has complete knowledge about the company
since he is one of the key persons who has remained committed towards the performance
(Chopra and Arora, 2011).
Thus the company’s directing mind could be engaged in a variety of activities related to the
improvement of the organisational performance. The doctrine of identification or the directing
mind and was finally implemented by Lord Visscount.
Though here it is discussed in the context of Australia, yet it is to be mentioned here that
Doctrine of Identification originated in English Law and the growth of the particular doctrine
later helped in improving prosecution regarding criminal activities of the company directors and
managers (Latimer, 2012).
4 | P a g e

(b) Research and Explain the phrase "PIERCING THE CORPORATE VEIL"
It is a legal decision that is strictly about treating the rights or duties of a corporation like the
rights or liabilities of the shareholders. Generally, the corporation is identified as an individual
legal person. This individual is ideally responsible for those debts it has incurred and at the same
time, the main beneficiary of the credit is also owed. Generally Common law countries focus on
upholding the principle of separate personhood, however in exceptional case, it is termed as
“Pierce” or ‘lift’ the corporate veil (Mann, 2013). “Piercing the corporate veil” therefore refers to
the judicially implemented exception to the individual legal entity principle where he court
identifies the differences of the corporation as well as hold a shareholder responsible for actions
of the corporations. A court could also implement the corporate veil in and when requested by
the company or the shareholders of the company. After the Saloman case, courts across the
world, namely the United States, Australia and England have underpinned exceptions to the
respective principle as mentioned in Saloman and they have pierced the corporate veil to uncover
the names, or those who control the particular company (Presser, 2016).
A general example of piercing the corporate veil is discussed below;
For example when a businessman has left the job of a director in the company and then signs a
contract stating that he does not compete with the organisation where he is not associated for the
time being. In Australian legal system, limited liability and separate legal personality are most
commonly discussed areas and special characteristics in the situation (Rudorfer, 2013). The
organisation is generally an artificial legal entity that it is separate from the shareholders and the
liability of the company’s debts if any is not completely supported by the capital of the business.
In this situation piercing the veil of incorporation is common and encourages shareholders to
further consider the company’s situation in a defined way (Biswas, 2011). The term ‘piercing the
veil’ was introduced in the United States in 1912, later other countries began using the phrase for
clear understanding and evaluation of a particular situation.
5 | P a g e

References
Barker, D. (2007). Essential Australian law. Abingdon [u.a.]: Routledge/Cavendish.
Biswas, L. (2011). Approach of the UK Court in Piercing Corporate Veil. SSRN Electronic
Journal.
Chopra, D. and Arora, N. (2011). Company law.
Latimer, P. (2012). Australian business law 2016.
Mann, T. (2013). Australian law dictionary.
Presser, S. (2016). Piercing the corporate veil. [New York, NY]: Thomson Reuters, Westlaw.
Review of Australian privacy law. (2007). Sydney, N.S.W.: Australian Law Reform
Commission.
Rudorfer, M. (2013). Piercing the corporate veil.
Spiro, P. (2013). Clarifying the Rules for Piercing of the Corporate Veil. SSRN Electronic
Journal.
6 | P a g e