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The Corporate Veil in the Corona

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UNIVERSITY OF TECHNOLOGY SYDNEY

   

Companies and Securities Law (COSEC 77947)

   

Added on  2020-03-04

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COSEC 77947 - Companies and Securities Law Assignment, The corporate veil is also known as lifting the corporate veil or piercing the corporate veil which defines the rights in the corporation for the application of the liabilities of the shareholders. Sometimes for the beneficial reason, the corporate need to operate with a separate legal person then they owned the responsibilities where the debts have been incurred. Section 140 of the Corporation act provides the effects of the constitution and replaceable rules by the companies.

The Corporate Veil in the Corona

   

UNIVERSITY OF TECHNOLOGY SYDNEY

   

Companies and Securities Law (COSEC 77947)

   Added on 2020-03-04

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Running head: COMPANY AND SECURITY LAWCompany and Security LawName of the StudentName of the UniversityAuthor Note
The Corporate Veil in the Corona_1
1COMPANY AND SECURITY LAWTable of ContentsAssessment Task 2...........................................................................................................................2Introduction......................................................................................................................................2Issue.................................................................................................................................................2Rule..................................................................................................................................................2Application......................................................................................................................................5Conclusion.......................................................................................................................................9References......................................................................................................................................11
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2COMPANY AND SECURITY LAWAssessment Task 2Introduction The corporate veil is also known as the lifting the corporate veil or piercing the corporate veilwhich defines the rights in the corporation for the application of the liabilities of theshareholders. Sometimes for the beneficial reason the corporate need to operate with separatelegal person then they owned the responsibilities where the debts has been incurred. It providethe limited liability of the corporation by the sole trader. Therefore as per the given case study, when Aussieair has formed a new company for theuplifting the corporate veil, they can able to gain the benefits and reduce the amount of the salaryfrom their employees then they want to take legal actions against them. The old employee’s alsooffered for fresh job on the new company where they get the same amount of salaries. Now asthey want to take legal actions against them for the issues. Issue According to the case study, the issue is whether Aussieair is liable for offence with theemployees of PNGair for not paying equal amount of salaries and conditions like Aussieair totheir employees? Rule According to the case study the directors of Aussieair has decided to reduce the salarypayment of the employees. Another new company PNGair has appointed same employees with25% less salary and benefits than Aussieair. The pilots and senior managers were paid in full
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3COMPANY AND SECURITY LAWsalaries along their redundancy entitlements (Alstadsæter, Jacob and Michaely 2017). Thereforeit can be stated that according to the Corporation Act the Sec- 184(1) defines the breach of dutiesof the directors. It is significant with the case studies because while inaugurate a new companythe authorities of the Aussieair appointing the employees and pilots with more benefits andsalaries. Whereas, they are reducing the salaries from the old company’s employees and pilotswhile the directors are getting their proper salaries and share bonus. Here the directors has breachthe duties (Grinblatt and Titman 2016).According to the corporate veil the company can take decision which is lawful for thecompany and provides the rights and liabilities of the shareholders. In this process of thecorporate veil the company applies the corporation rules for providing the separate legal entitywhere the shareholders will pay the debts and individually it will pay the sole beneficiaryaccording to the separate legal system. Therefore the limited liability will applicable on theseparate legal entity (Alstadsæter, Jacob and Michaely 2017). The separate legal entity defines acomplete individual debt rather than any other private debts where the company will not interfereI any private assets. In this part the shareholders can be liable for the separate rights ad liabilities.The application of the corporate veil is only applicable according to the order by the court. According to the Corporation Act 2001 section 135 defines the divisible rules of thecompanies (Baños-Caballero, García-Teruel and Martínez-Solano 2014). The company has aparticular constitution where is they can replace the rules as per the property companies which isregistered repealed the constitution according the provisions. The section 136 provides theconstitution of a company. According to this section 8 company can adopt a constitutionaccording the registration of the company and each of the member of the company agrees withthe writing terms of the Constitution before they applied for the company and later after
The Corporate Veil in the Corona_4

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