Company Law and Liability

The assignment discusses company law and two main concepts: Directing Mind and Will, which defines the liability of directors in a corporation, and Piercing the Corporate Veil, which allows for personal liabilities to be applied to directors and shareholders when they are involved in misconduct or misrepresentation. The discussion includes references to court cases such as Tesco Supermarkets Ltd v Nattrass [1972] and Adams v Cape Industries plc [1990].

Running head: COMPANY LAW
Company Law
Name of the Student
Name of the University
Author Note

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Table of Contents
Part 2................................................................................................................................................1
a. Directing Mind and Will..........................................................................................................1
b. Piercing the Corporate Veil.........................................................................................................2
Reference.........................................................................................................................................3

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Part 2
a. Directing Mind and Will
It defines the liability of the directors of ted corporation where they get involved with
various duty related with the corporation. In the liability of the corporation, the
authorities like managers, directors, officers are related with such offences. The board of
directors has the more responsibilities where if they have found with guilty then it is
identified with the individual liabilities. The corporation not always found guilty for any
offences related with the corporation but it will hold liable when the directors and other
members of the corporation has involved with the criminal responsibilities (Hodge and
McLain 2015).
The term ‘maxim Actus non facit reum nisi means sit rea’ is define as the rules
of the liability where the corporation is related. However, it will only recognize as
forbidden when the criminal activities has been acted or omission by the corporation
itself with the intension of the criminal suspects. Most of the time the liabilities are
defines the criminal aspects where the corporation is found to be related with the criminal
vicarious liability which has been described according to the statutory offences. When
the directors has found guilty with the criminal liabilities they are also prohibits with
penalty and fines where shareholders, employees and other innocent parties can be
benefited with the compensation (Hodge and McLain 2015).
In the case of Tesco Supermarkets Ltd v Nattrass [1972] the court has stated
the corporation liabilities where the court has make the restriction on the actions of the

3COMPANY LAW
directors and the managers who are directly related with criminal liabilities (Hodge and
McLain 2015).
b. Piercing the Corporate Veil
It is a process where the limited liability company has provide such personal
liabilities for the directors and the shareholders individually regarding the due debts or
acts in the corporation. It also recognizes legal liabilities of those members who get their
separate legal responsibilities under the corporation. It only provides such responsibilities
for incurs regarding the debts and sole beneficiary of the owned credits of them.
Therefore it will only applicable for such sole or partnership which will entitles with the
limited liability companies (Lam 2015). Corporations exist in part to shield the personal
assets of shareholders from personal liability for the debts or actions of a corporation.
Unlike a general partnership or sole proprietorship in which the owner could be held
responsible for all the debts of the company covers the whole responsibilities.
The Piercing the Corporate Veil is a term which affect the corporate who are
entitles with small business with the limited assets and reorganization of separateness of
the corporations and must able to identified when it promoting the misconducts of the
corporation. Adams v Cape Industries plc [1990] is a famous case which has been
describes the Corporate Veil due the separate legal entity of the limited liability
companies for finding the fraudulent activities. The implementation of the Corporate Veil
always helps in the existing rights and duties of the corporation according to the
Corporation Act. Sometimes the state has depends on the related laws of corporation act
where it always ignore the presumption against the Corporate Veil fir the involvement of
the misconducts or misrepresentation through a particular corporation (Lam 2015).

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Reference
Adams v Cape Industries plc [1990] Ch 433
Hodge, F. and McLain, M., 2015. Play directing: Analysis, communication, and style. CRC
Press.
Lam, C.L., 2015. Piercing the Corporate Veil.
Tesco Supermarkets Ltd v Nattrass [1972] AC 153