Company Law: Directing Mind & Piercing the Veil

This assignment delves into two fundamental principles of company law: 'directing mind and will' and piercing the corporate veil. It examines how a company's decision-making process reflects its overall philosophy and how courts can disregard the separation between a corporation and its shareholders in certain circumstances. The assignment uses examples to illustrate these concepts, highlighting their importance in legal and business contexts.

Company Law 1
COMPANY LAW
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Company Law 2
The Phrase “directing mind and will” is a legal term that mainly applies in an organization setup
whereby the person who is tasked with the responsibility of making decisions for the company
such as the, manager, makes decisions that determines the focus and direction of the company. A
company is considered as a legal person and is required under the law to operate through the
assistance of natural persons. In that regard, there are rules that govern the attribution of
individual acts to the company such that the actions of individual persons acting on behalf of the
company are considered as the actions of the company.
Thus, the thinking, philosophy and the state of mind of persons that assume management
responsibilities in companies, institutions and major organizations, is critical in directing the
mind and the will of that particular organization. For instance the school of thought that a
manager adopts to run a particular institution becomes the embodiment of that organization. In
many cases, such phrase can be clearly explained in the constitution of courts where the judges
can either be considered as conservative or liberal. In such instances the whole court system is
considered as conservative or liberal depending on the line of thought that the judges resolve to
undertake while making their constitutional and legal interpretations of the law (Parkinson
1995). The thinking and philosophical persuasion of the person in charge of making critical
decisions on behalf of the company, organization or an institution becomes an embodiment of
the mind and the will of the organization.
Question 2
Piercing the corporate Veil is a legal term used to describe the decision treats the duties or rights
of an organization as the rights of the shareholders. Similarly, it treats the liabilities of the
organization as the liabilities of the shareholders. A corporation is considered as a separate legal
entity that is solely responsible for its debts as well as a beneficiary of the credit it’s owed. In

Company Law 3
common law, the principle of viewing a company as a “separate legal person” is upheld at all
times except for few exceptions where the corporate veil is lifted (Koutsias 2016). A good
example is where a business person leaves his job from a company and signs an agreement not to
compete with his former employer company. When he/she moves on to establish another
company that ends up competing with his/her former company, and then he/she is not deemed to
have personally competed with the former company, but rather a company competing with the
other. However, the former company may lift the corporate veil and argue that such actions are a
cover up to the real action and intentions of their former employee. In such situations, affected
company is allowed to sue their former employee as a person rather than suing the company that
was incorporated by that particular individual.
In general terms, lifting the corporate veil is going against the established principles and going
for the particular individuals that have committed any offence in an organization rather than
condemning the whole company for individually committed mistakes.

Company Law 4
Bibliography
Koutsias, M., 2016. Economic Actors and Legal Certainty. Comparing Company Law.
Parkinson, J.E., 1995. Corporate power and responsibility: Issues in the theory of company
law. OUP Catalogue.