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PLAGIARISM SCAN REPORT

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This corporation is known as entity and independent of the people who create it. Incorporation is a process that bring
up a company into existence. When an organization has been legitimately incorporated, it turns into a particular entity
from the individuals who contribute their capital and work to run the company. A company is a lawful entity without help
from anyone else. Incorporated company is a company that has a different lawful entity or artificial legitimate individual
and exists freely expresses under Companies Act 1965. A company will be equipped for practicing all elements of a
body corporate and have the full ability to continue or attempt any business or movement under section 21 (1) CA2016.
All in all, a company survive is existed independently from the individuals, officials, workers just as the proprietor of the
organization.
Various limits of individuals, for example, proprietors, chiefs, supervisors and workers dealing with the organization as it
is an artificial individual. It is known that the company empower it to be totally separated from its individuals. Companies
Commission of Malaysia need to be registered since it is a rule of independent legitimate substance meets up with a
couple of impact of fuse in understanding to Section 16(5) Companies Act 1965. Usually most traditional type
businesses must take shape in the form of company. Private limited companies need to be visible to potential
customers, investors and financiers. In this issue Kemas Ltd and Rozel Ltd company and it is incorporated. This
company separate from its owner, possible to form a contact using their name, and responsible for own undertakings,
finances and liability.
2.0 PRINCIPLE
2.01 Veil of Incorporation
The corporate veil definition is a legal term that distinguishes an organization's activities from the shareholder's actions.
Moreover, it prevents them from being responsible for the actions of the company. That does not necessarily mean that
there is always security in place. A court may also decide whether or not they hold shareholders liable for the acts of a
corporation. A organization is, from the legal point of view, a legal person independent from its members [Salomon v.
Salomon and Co. A.C 22], Ltd. (1897). The 'Veil of incorporation' can be referred to as this principle. The courts
consider themselves to be bound by this principle in general. The consequence of this theory is that the organization
and its members have a fictional veil between them.
The Courts would not authorize the principal of Salomon to be used as an engine of fraud. Gilford Motor Company Ltd
v. Horne and Jones v. Lipman are the two classic examples of the fraud exemption. In the first case, Mr. Horne was a
former employee of The Gilford Motor Company and his contract of employment provided that the company's
customers could not be solicited. In the second case of Jones v. Lipman, a man contracted to sell his land and
thereafter changed his mind in order to avoid an order of specific performance he transferred his property to a
company. The act of piercing the corporate veil until now remains one of the most controversial subjects in corporate
law. There are categories such as fraud, agency, sham or facade, unfairness and community businesses, which are the
most special ground on which the corporate veil can be breached by the Law Courts. These definitions, however, are
just guidelines and are by no means far from exhaustive.

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COMPANY LAW: LIFTING THE CORPORATE VEIL – trizzmichaelslaw

https://trizzmichaelslaw.wordpress.com/2016/06/15/company-law-lifting-the-corporate-veil/

Lifting of the Corporate Veil | Piercing The Corporate Veil

the act of piercing the corporate veil until now remains one of the most controversial subjects in corporate law. there
are categories such as fraud, agency, sham or facade, unfairness and group enterprises, which are believed to be the 4%
most peculiar basis under which the law courts would...

https://www.scribd.com/document/409582022/Lifting-of-the-Corporate-Veil
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PLAGIARISM SCAN REPORT

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Gilford was a businessman who was associated with the matter of selling assembled items under the name of Gilford
Motor Vehicles online. Gilford bought the engine parts from the makers, assembled them, and sold them online. The
business likewise included selling the spare parts and servicing the engines which had been sold online.
Gilford later recruited Horne, as a managing director. It was a contractual work for six years. However, the agreement
contained a limitation on exchange to be carried on by the employee, wherein the employee was not permitted to solicit
any of the clients of the company while at the organization or after end of the contract.
Unfortunately, the agreement of work between Gilford and Horne finished after two and half years, then Horne left the
organization. However, soon after he left the work at Gilford Motor Vehicles, he incorporated a limited company in his
wife’s name, under the name J.M. Horne and Co. Ltd. He solicited few of the clients of the company, whom he had
tempted from his dealings with them while he had been working at Gilford Motor Vehicles.
The Gilford Motor Vehicle company brought an action against him. According to the Court of Appeal, the organization
was shaped as a gadget, a trick, to veil the compelling carrying on of business of Mr. Horne. In this situation, obviously
the principle motivation behind consolidating the new organization was to execute fraud. Thus, the Court of Appeal
viewed it as a mere sham to cloak his bad behaviors.
To sum up, this case is an example to show the situations where the corporate veil might be punctured by the Court to
evaluate whether the organization being run is being utilized as a sham to conceal the acts of the directors or the
agents. In this situation, Horne and his better half were the only two directors of the organization, they were utilizing a
similar publicizing material, just as the way that the clients which they were gathering were the ones with whom Horne
had the opportunity to work with while Horne had still been employed at Gilford Motor Vehicles. The same clients were
being tempted by Horne, which was a clear violation of the restrictive covenant in the work contract, yet Horne tried to
sidestep this limitation by doing as such behind the protection of the corporate veil.

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PLAGIARISM SCAN REPORT

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Lipman had decided to sell his property to Jones for £ 5,250, but then changed his mind afterwards. He then founded a
company of his own, which had £ 100 in capital, and made himself both the director and the owner. He then sold the
land to this sham company for £ 3,000, which he initially had agreed to sell to Jones. Lipman had borrowed more than
half of the money required through a bank loan in order to make such a transaction, and the remainder was owed to
other external sources. Accordance with the terms of the Rules of Order 14A of the Supreme Court, the purchaser
applied for a particular activity against the vendor and the organization of the vendor for the exchange of the assets in
issue.
The issue here was, if an order of particular performance could be imposed in the circumstances, the court was
required to decide. Was the company of Lipman an excuse to circumvent a pre-existing legal duty? This was the
question raised in this case. In particular, in order to see if it was reasonable, it was necessary for the court to examine
the business that Lipman had formed and the selling of the purchase agreement. The court was however forced to
decide if it was reasonable for the Supreme Court's rules to be applicable to the sort of situations.
As the court’s action, the court had decided that the The Rules Of Supreme Court can be applied to this situation. It
was identified that somehow the defendant's business was founded by the defendant as a veil to prevent attention and
a particular performance obligation could not be prevented on this condition. This became obvious that the defendant
was in charge of the phony corporation that owned the land, and so Lipman was the only one who was able to enforce
the contract.
As to relate the case above to the case study given, Paul had avoided the contract with Ram by transferring the
ownership of the house to his company. This is as same as Lipman, who had sold his company to a sham company. As
looking through this both the defendant is responsible for making the phony agreement to avoid being differing their
legal duty.

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Initially from this case we would like to advice for Kemas Ltd and its former worker, Paul had at the same time agreed to
a restraint of change underneath the contract of employment wherein, Paul as the formal worker in the occasion of
leaving the employment become constrained from soliciting Kemas Ltd's customers for a length of two years. Paul's
omission to restrain from soliciting customers of Kemas Ltd. for the period of two years results in the breach of restraint
of trade clause. Kemas Ltd. should file for an injunction at the Court of jurisdiction to stop Paul from committing the
breach that is stop from soliciting customers of Kemas Ltd and in addition document for repayment of damages with the
aid of the Court from Paul in terms of any income earned by means of Paul in trading with the customers of Kemas Ltd.
2.32 Ram
By observing the case we come to understand that Paul enters right into a settlement to promote his house to Ram for
RM2 million earlier than Owen makes him an offer of RM2.5 million for his residence. Since the agreement is already
made by using Paul and Ram, Ram should certainly take prison movements against Paul as he has dedicated a fraud
via signing a settlement with Ram to promote his residence for RM2 million, but instead of promoting the house to Ram,
he end up moving into a negotiation with Owen to promote the residence for a further quantity of RM0.5 million than
ram provided (RM2.5 million). Although Paul transfers the ownership of the residence to ROZEL Ltd, it does not rely
motive the contract to promote the residence to Ram was made already. A member shall now not be answerable for a
duty of an enterprise by reason simplest of being a member of the agency (Companies Act 2016, section 192 (1)).
Therefore, regarding this regulation, it is able to be known that Owen should and must not be the motive for Paul to
negotiate and promote his house. This is due to the fact, just by using being a member or employee of the organization,
one couldn't take delivery of rights or responsibility to have the ownership of a property.
3.0 CONCLUSION
In conclusion, by looking at the decided case of Gilford Motor Vehicle v Horne, Kemas Ltd is advised that it can bring an
action against Paul for breach of the contract (covenant) as he used his company, Rozel Ltd “as a device, a stratagem
in order to mask the effect carrying on of a business” of Kemas Ltd. The purpose of it was to enable him under what is
a cloak or sham, to engage in the business. Therefore, Kemas Ltd may bring an action for an Injunction against Paul as
the veil of corporation on Rozel Ltd may be lifted. As regard to the case of Ram and Paul. The court will assess the
creation of the company and the transaction of the sale of the property. Where the corporation veil has been used for
the commission of fraud or improper conduct, the court can lift the veil. Thus, it is obvious here that Paul’s company
was created as “mere facade” and as “a mask to avoid recognition by the eye of equality”. As such Ram is advised that
he can bring an action against Paul for Specific Performance as decided in Jones v Lipman as the court may lift the veil
by looking at the realities of the situation.

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