Separate Corporate Personality: Case Study

1916 Words8 Pages
Separate corporate personality Introduction There has been the establishment of the law of separate corporate strategy in the common law after the decision in Salomon's case (Shub, 2006). This is where a corporation or any other business organization has a separate legal personality; obligations as well as rights are totally different from those of the shareholders (Weissman, 2012). Nevertheless, legislation as well as courts, usually pierces the corporate veil for the purpose of holding the shareholders of the corporation accountable for the liabilities of the company (Weissman, 2012). In addition, the court may lift the corporate veil in the conflict of the laws (Shub, 2006). This is for the purpose of determining the controller of the company, and hence be able to ascertain the company's true contracts as well as closest, and most real connections. For the purpose of fully understanding and appreciating these laws, the people need to understand the nature of the company (Shub, 2006). Despite the fact that the legal definition of the separate corporate personality is ambiguous and vague, common parlance usually provides ideas of a company (Weissman, 2012). Legally, it is impossible for a sole proprietorship to segregate his private means from those of his business (Shub, 2006). Similarly, in the event of any crisis related to the company, financial or debts, the sole proprietorship should meet all of them through his private finances. With regard to this, it is a fact
Open Document