Corporation and Contract Law

Running head: ESSAY 1
CORPORATION AND CONTRACT LAW
Student details:
5/25/2019

ESSAY 2
According to the company law, it is specially considered that the company is a legal person, as
the subject of obligations as well as rights, which is able to own the real properties and to take
entry in the contract. It also has the capacity to sue as well as be sued. The separate legal entity
of corporation is considered as most exclusive characteristic. This is very significant to have the
knowledge of the popular Corporate Veil Theory. It is also required to know the scenes where
the lifting and piercing the corporate veil is feasible. The theory of Corporate Veil is a
permissible theory that takes apart from the liability arising because of the functions of the
corporation. Consequently, in a case where the corporation occurs the debts or breaches the
rules, regulations and laws, in that case the members are not liable for those errors and enjoy
corporate insulation. In simpler words, the stakeholders of the company are secured from the
company’s functions.
A doctrine of veil of incorporation is the lawful theory, which makes separation between the
company’s personality corporations from shareholder’s personalities, as well as secures them
from being personally liable for the obligations and debt of corporation. When a corporation is
the separate legal entity, in that case this may only perform by the human agent, who creates this,
may not be mistreated. As the artificial person is not able of conducting the unlawful or deceitful,
the pretense of company’s personality may have to be ended to recognize people, who are
actually culpable. It is also considered as a lifting of a corporate veil. As well legal requirements
to lift the corporate veil, court does lift a corporate veil to consider an actual state of affair. On
the other hand, although the court as well as administration have in various matters now
permitted a corporate veil to get lifted, this must be considered that a theory of veil of
incorporation is still principal an instance of piercing veil or lifting veil are exception to this

ESSAY 3
theory. Additionally, the legal theory, which separates the personality of the company from the
shareholder’s personality, and secures them from being individually accountable for company.
The following questions are raised in this regard-
1. If this is conceivable to lift corporate veil or pierce corporate veil?
2. As per a case when answer of above question is yes, then what are the situations and
regulations that oversee piercing corporate veil and lifting the corporate veil?
Piercing corporate Veil refers seeing beyond the corporation as the legal person. Otherwise,
disregard the corporate identity and paying regards towards human beings in its place. In some
matters, the Court ignores a corporation and apprehends themselves in direct way with the
company’s manger and other members of the corporation. It is considered as piercing a corporate
veil. Generally, a court selects options while the matter includes the questions related to
administer control in place of the possession. There are some conditions where the court
considers piercing the corporate veil or lifting corporate veil. These situations related to lifting
and piercing are explained as below-
1. To know the corporation’s characteristics
There are the situations in which the courts require to know in a case where the corporation is the
opponent or companion. In these matters, the court follows a test of control. The court normally
ignores piercing a corporate veil, except public interest is in risk or the threat. Though, to
determine whether the corporation is the enemy corporation, a court may select to do same. In
this way, the question is that how may the corporation be the enemy? This does not contain the
mind, awareness and carefulness, as well as may not be the companion or enemy. Though, if the

ESSAY 4
corporation’s affairs are in a control of people from foe nation, in that case an entity may be the
foe too. In these situations, the court can assess the people’s character (Hannigan 2018) .
2. The protection of taxes and revenues
In cases relating to avoidance and circumvention of duty and tax, a court may ignore the
corporate entity. There are some corporations, which are used to avoid taxes. In these matters,
piercing corporate veil permits courts for knowing real owner of a company’s earnings and
create the said individual accountable for lawful taxes (Parker 2015).
3. When trying to ignore the legal obligations
Sometimes the corporation’s members can create other corporation or subsidiary corporation to
ignore some legal obligations. In these matters, piercing corporate veil permits a court to know
actual transaction. Imagine a company liable to share twenty per cent of the profit with the
workers as the additional benefit. It is the legal compulsion. To stay away from this, the entity
establishes the wholly owned subsidiary corporation and makes transfer of the investment
holding to this. The new corporation developed has no asset of the personal as well as no
business related earnings either. This is totally dependent on a main corporation. Through
creating this, the main corporation decreased the bonus amount liable to made payment to
workers of corporation. A court, by piercing corporate veil, may know the actual intentions of a
main corporation and also make sure that it achieves the lawful obligation (Lezcano 2015).
4. Creating subsidiary to perform like the agent
Every so often, the foundations of the creation of the corporation are to perform like the agents
or trustees of the member of other corporation. In these matters, a corporation loses the