The document discusses the legal concept of "lifting the corporate veil", which refers to courts ignoring the separate legal entity of a company. This is done in certain circumstances, such as when a company's separate legal identity is being misused to commit fraud or acts against public policy. The document outlines several cases where courts have lifted the corporate veil, including to determine a company's true character (e.g. if it is effectively controlled by enemies during war), protect government revenue from tax evasion, protect a company's own justified interests, and avoid obligations under welfare legislation.
The document discusses employee welfare, including definitions, types of welfare activities, merits and demerits of welfare schemes, and facilities provided at ITI. It covers welfare both inside and outside the workplace, such as health services, canteens, housing, and recreation. Theories of welfare administration and assessment of welfare effectiveness are also mentioned. Fringe benefits and safety and health measures for employees are briefly outlined.
The document summarizes the history of the legal system in India from 1772 to modern times. It discusses three key periods: (1) The Anglo-Hindu law period from 1772-1864 when British administrators compiled Hindu law texts and used court pandits to interpret them. (2) From 1864-1947 when Britain legislated codified laws based on English common law and replaced Hindu law, except for family matters. (3) After independence in 1947, India adopted the modern Hindu law which governs family matters through acts like the Hindu Marriage Act. The document also briefly discusses Islamic law and the development of the court system under British rule.
The document discusses the role and duties of a company secretary. It defines a company secretary as an individual who undertakes secretarial work and manages the affairs of a company as determined by law and the board of directors. The duties of a company secretary include statutory requirements under various acts, as well as general duties related to directors, shareholders, organization and office management, and serving as a liaison to the public.
This document discusses company membership and members' rights. It outlines who can be a company member, including individuals, companies, partnerships and foreigners. Membership can occur through subscribing to the memorandum of association, share application and allotment, agreeing to become a director, share transfer or holding oneself out as a member. Membership ends through share transfer, forfeiture, surrender, lien sale, death, insolvency, repudiation or company winding up. The register of members must include members' names, addresses, occupations, share details and dates of becoming or ceasing membership. The rights of members include claiming share certificates, voting on dividends, attending meetings, appointing auditors and directors, and accessing company accounts
This presentation provides an overview of the Factories Act of 1948 and the Shops and Establishments Act of 1953 in India. The Factories Act aims to ensure safety, health, and welfare of workers through provisions around working hours, hazardous equipment/processes, annual leave, and restrictions on child labor and women's employment. It applies to premises with 10+ or 20+ workers depending on use of power. The Shops and Establishments Act provides rights for employees and obligations for employers in small shops and establishments, covering registration, working hours, leaves, hiring/firing, and record keeping. Both acts aim to protect workers and should be consulted when starting a new enterprise.
In Narmada Bachao Andolan vs Union of India, the Supreme Court upheld the construction of the Sardar Sarovar Dam on the Narmada river. It observed that the dam project had adequate environmental clearances and would have positive environmental impacts. It also found that a proper rehabilitation plan was in place for displaced families with mechanisms to monitor its implementation. While noting some delays, the Court directed the states to fully implement the rehabilitation package and closely monitor compliance. It allowed dam construction to continue in a phased manner based on clearances from authorities overseeing rehabilitation and environment protection.
This document discusses different types of company shares. It describes equity shares, which provide ownership and voting rights but variable dividends, and preference shares, which offer fixed dividends but no voting rights. Preference shares can be cumulative, participating, convertible, redeemable, or non-redeemable. The document outlines advantages like limited liability for equity shareholders and guaranteed dividends for preference shareholders, as well as disadvantages such as variable or low dividends. It provides examples of share issuance transactions to journalize.
Mr. Aron Salomon was a boot and shoe manufacturer who had a wife, daughter, and five sons. He ran his business as a sole trader for many years until his sons became interested in joining the business. He then converted the business into a limited company. The company purchased Salomon's business for £40,000 through £10,000 in debentures, £20,000 in equity shares, and £10,000 in cash. Salomon took 20,000 of the company's 20,000 shares while his family each took one share. However, the business failed in the economic depression and the company went into liquidation with insufficient assets to pay unsecured creditors.
This document provides an overview of key concepts related to partnership law in India. It defines a partnership as a relationship between two or more people who agree to share profits from a business. A partnership must have a minimum of 2 partners and a maximum of 10 partners for banking or 20 for other businesses. Partners are jointly liable for all debts of the firm. Unregistered partnerships have some limitations. The document outlines types of partners, rights of partners, and rules that apply in the absence of a partnership agreement.
This document summarizes various ways that companies can be classified under Indian law. It discusses classification by mode of incorporation such as royal chartered, statutory, and registered companies. It also covers classification based on liability of members into companies limited by shares, companies limited by guarantee, and unlimited companies. Additionally, it discusses classification as public or private companies and one person companies. It provides examples of holding companies and their subsidiaries. Finally, it defines government companies and foreign companies under Indian law.
The document provides information on the types of joint stock companies. It discusses companies based on:
1) Method of formation - chartered, statutory, registered companies
2) Liability of members - companies limited by shares, guarantee, unlimited companies
3) Membership - private, public limited companies
4) Ownership - government companies
It also outlines the key characteristics and stages of promotion for establishing a joint stock company.
This document discusses labour welfare in India. It begins by defining labour welfare as anything provided to employees over and above wages to improve their comfort and motivation. This includes facilities like healthcare, housing, transport, recreation, education and more. Labour welfare is important for employee retention, good employee relations, and motivation. It can be statutory, mandated by law, or non-statutory and voluntarily provided. The document outlines several examples of statutory and non-statutory welfare schemes and programs implemented across various industries in India.
This document discusses labour welfare in India. It defines labour welfare as benefits provided to employees beyond wages to improve their comfort and well-being. Labour welfare is important to boost employee morale, motivation, and retention. It can include statutory schemes mandated by law as well as voluntary non-statutory schemes. Statutory schemes cover facilities like drinking water, seating, first aid, toilets, and canteens, while non-statutory schemes include health checks, flexible schedules, leave policies, and insurance. The goals of labour welfare are to improve workers' lives, make them satisfied, relieve work fatigue, and boost productivity and efficiency.
Jensen Meckling Agency Theory Presentation LuomaBreatheBusiness
The 1976 article by Jensen and Meckling introduced the concept of agency theory to analyze conflicts of interest between managers and owners of firms. It defined agency costs as the costs of monitoring, bonding, and residual loss incurred to mitigate divergences from shareholders' interests due to differing goals of managers. The paper also viewed the firm as a legal fiction serving as a nexus for contracts between individuals with conflicting objectives, rather than as a single maximizing entity. It integrated prior research on property rights, organization theory, and incentives to develop a new understanding of corporate ownership structure.
Trade Unionism, Trade Union, Trade Union in India, Trade Union Act 1926, Trade Union History, Trade Union Movements in India, Trade Union Definition, Trade Union Objectives, Trade Union Characteristics, Trade Union Functions, Problems of Trade Union, Concept and Meaning of Trade Union, Labour's social security, Indian Labour Problems and Legislation
37 frases-inspiradoras-sobre-engagement-y-experiencia-del-empleadoErick Alejandro García
Este documento presenta 37 frases inspiradoras sobre la importancia de mejorar el compromiso de los empleados y la experiencia del empleado. Resalta que empleados felices y comprometidos son más productivos, ofrecen mejor servicio a los clientes y tienen menos probabilidades de abandonar la organización. Además, enfatiza que la experiencia del empleado y la experiencia del cliente están ligadas, por lo que empleados felices generan clientes felices y empresas rentables.
The document discusses employee welfare, including definitions, types of welfare activities, merits and demerits of welfare schemes, and facilities provided at ITI. It covers welfare both inside and outside the workplace, such as health services, canteens, housing, and recreation. Theories of welfare administration and assessment of welfare effectiveness are also mentioned. Fringe benefits and safety and health measures for employees are briefly outlined.
The document summarizes the history of the legal system in India from 1772 to modern times. It discusses three key periods: (1) The Anglo-Hindu law period from 1772-1864 when British administrators compiled Hindu law texts and used court pandits to interpret them. (2) From 1864-1947 when Britain legislated codified laws based on English common law and replaced Hindu law, except for family matters. (3) After independence in 1947, India adopted the modern Hindu law which governs family matters through acts like the Hindu Marriage Act. The document also briefly discusses Islamic law and the development of the court system under British rule.
The document discusses the role and duties of a company secretary. It defines a company secretary as an individual who undertakes secretarial work and manages the affairs of a company as determined by law and the board of directors. The duties of a company secretary include statutory requirements under various acts, as well as general duties related to directors, shareholders, organization and office management, and serving as a liaison to the public.
This document discusses company membership and members' rights. It outlines who can be a company member, including individuals, companies, partnerships and foreigners. Membership can occur through subscribing to the memorandum of association, share application and allotment, agreeing to become a director, share transfer or holding oneself out as a member. Membership ends through share transfer, forfeiture, surrender, lien sale, death, insolvency, repudiation or company winding up. The register of members must include members' names, addresses, occupations, share details and dates of becoming or ceasing membership. The rights of members include claiming share certificates, voting on dividends, attending meetings, appointing auditors and directors, and accessing company accounts
This presentation provides an overview of the Factories Act of 1948 and the Shops and Establishments Act of 1953 in India. The Factories Act aims to ensure safety, health, and welfare of workers through provisions around working hours, hazardous equipment/processes, annual leave, and restrictions on child labor and women's employment. It applies to premises with 10+ or 20+ workers depending on use of power. The Shops and Establishments Act provides rights for employees and obligations for employers in small shops and establishments, covering registration, working hours, leaves, hiring/firing, and record keeping. Both acts aim to protect workers and should be consulted when starting a new enterprise.
In Narmada Bachao Andolan vs Union of India, the Supreme Court upheld the construction of the Sardar Sarovar Dam on the Narmada river. It observed that the dam project had adequate environmental clearances and would have positive environmental impacts. It also found that a proper rehabilitation plan was in place for displaced families with mechanisms to monitor its implementation. While noting some delays, the Court directed the states to fully implement the rehabilitation package and closely monitor compliance. It allowed dam construction to continue in a phased manner based on clearances from authorities overseeing rehabilitation and environment protection.
This document discusses different types of company shares. It describes equity shares, which provide ownership and voting rights but variable dividends, and preference shares, which offer fixed dividends but no voting rights. Preference shares can be cumulative, participating, convertible, redeemable, or non-redeemable. The document outlines advantages like limited liability for equity shareholders and guaranteed dividends for preference shareholders, as well as disadvantages such as variable or low dividends. It provides examples of share issuance transactions to journalize.
Mr. Aron Salomon was a boot and shoe manufacturer who had a wife, daughter, and five sons. He ran his business as a sole trader for many years until his sons became interested in joining the business. He then converted the business into a limited company. The company purchased Salomon's business for £40,000 through £10,000 in debentures, £20,000 in equity shares, and £10,000 in cash. Salomon took 20,000 of the company's 20,000 shares while his family each took one share. However, the business failed in the economic depression and the company went into liquidation with insufficient assets to pay unsecured creditors.
This document provides an overview of key concepts related to partnership law in India. It defines a partnership as a relationship between two or more people who agree to share profits from a business. A partnership must have a minimum of 2 partners and a maximum of 10 partners for banking or 20 for other businesses. Partners are jointly liable for all debts of the firm. Unregistered partnerships have some limitations. The document outlines types of partners, rights of partners, and rules that apply in the absence of a partnership agreement.
This document summarizes various ways that companies can be classified under Indian law. It discusses classification by mode of incorporation such as royal chartered, statutory, and registered companies. It also covers classification based on liability of members into companies limited by shares, companies limited by guarantee, and unlimited companies. Additionally, it discusses classification as public or private companies and one person companies. It provides examples of holding companies and their subsidiaries. Finally, it defines government companies and foreign companies under Indian law.
The document provides information on the types of joint stock companies. It discusses companies based on:
1) Method of formation - chartered, statutory, registered companies
2) Liability of members - companies limited by shares, guarantee, unlimited companies
3) Membership - private, public limited companies
4) Ownership - government companies
It also outlines the key characteristics and stages of promotion for establishing a joint stock company.
This document discusses labour welfare in India. It begins by defining labour welfare as anything provided to employees over and above wages to improve their comfort and motivation. This includes facilities like healthcare, housing, transport, recreation, education and more. Labour welfare is important for employee retention, good employee relations, and motivation. It can be statutory, mandated by law, or non-statutory and voluntarily provided. The document outlines several examples of statutory and non-statutory welfare schemes and programs implemented across various industries in India.
This document discusses labour welfare in India. It defines labour welfare as benefits provided to employees beyond wages to improve their comfort and well-being. Labour welfare is important to boost employee morale, motivation, and retention. It can include statutory schemes mandated by law as well as voluntary non-statutory schemes. Statutory schemes cover facilities like drinking water, seating, first aid, toilets, and canteens, while non-statutory schemes include health checks, flexible schedules, leave policies, and insurance. The goals of labour welfare are to improve workers' lives, make them satisfied, relieve work fatigue, and boost productivity and efficiency.
There are three main types of mergers: absorption mergers where one company loses its identity and is absorbed into an existing company; consolidation mergers where two companies dissolve to form an entirely new company; and horizontal mergers where two direct competitors combine. Mergers allow companies to increase market share, diversify offerings, and reduce financial risk through greater resources. However, mergers can also fail due to issues with cultural integration, communication, and mismanagement. Acquisitions differ from mergers in that the acquired company maintains its separate identity but has new ownership and control. Takeovers refer specifically to public acquisitions where an acquiring company makes a purchase offer for all outstanding shares of the target company. Takeovers can be friendly through negotiated agreements or hostile against the
The document defines marriage as a social or legal union between people that creates kinship and family. A legal marriage is defined as a union between a man and woman where they are sexually and economically united and may have or adopt children. Marriage is typically intended to be a permanent relationship. Common reasons for marriage include having a lifelong partner you love, having children and building a family, and gaining economic and social benefits. Marriage structures can include monogamy, polygamy, or polyandry. The document also discusses child marriage as a problem in India and outlines the legal ages for marriage and penalties under the Prohibition of Child Marriage Act.
The document discusses the roles and responsibilities of a Company Secretary under the Companies Act 2013. It defines a Company Secretary as a member of the Institute of Company Secretaries of India appointed by a company to perform various statutory and governance functions. These include ensuring compliance with company and securities laws, reporting to the Board of Directors, and assisting the Board on corporate governance matters. The document also outlines the duties of a Company Secretary and their role in coordinating between the Board, shareholders, regulators and other stakeholders. A Company Secretary is a key governance professional in a company.
1. A company is a separate legal entity from its members, created through registration under the Companies Act. It has perpetual succession and can own property, sue and be sued in its own name.
2. While a company's members have limited liability, the court may lift the corporate veil in certain situations, such as when the company is being used to commit fraud.
3. The corporate veil can be lifted by statute, such as when directors knowingly allow a company to trade while insolvent, or through common law, such as when a company is being used as an agent or to avoid legal obligations.
MEMORANDUM OF ASSOCIATION AND ARTICLES OF ASSOCIATION WITH DOCTRINE OF ULTRA...Anushka Singh
This document discusses the memorandum of association and articles of association of a company under Indian law. It provides details on the memorandum of association, including its purpose and required clauses. It also explains the doctrines of ultra vires and indoor management, which relate to a company acting beyond its powers as defined in the memorandum or internal management issues, respectively. The memorandum establishes the fundamental conditions and defines the company's powers, and any acts beyond these powers would be considered ultra vires and void.
The document discusses the legal doctrine of piercing the corporate veil, where the courts may ignore the separate legal identity of a company and its members. It provides examples of when courts have pierced the corporate veil, such as when the corporate form has been misused or abused to commit a fraud or improper conduct. It also discusses cases where courts have pierced the corporate veil to hold individuals criminally or civilly liable when they have misused the corporate form to evade taxes, hide criminal activities, or violate public policy. The document analyzes the seminal Salomon v. Salomon case, where the court upheld the separate legal identity of a company, even when wholly owned and controlled by one individual.
This document provides an introduction to the nature and definition of a company. It defines a company as an artificial legal person created by law for the purpose of carrying out business. The key characteristics of a company include separate legal identity, limited liability for members, transferable shares, perpetual succession, and being managed by a board of directors who are separate from the company's owners. The document also discusses the principle of separate legal entity, which establishes that a company is legally distinct from its members and managers. Exceptions when the court may "pierce the corporate veil" and hold individuals liable for a company's debts are also outlined.
The document discusses the principle of separate legal entity between a company and its members/officers established in Salomon v Salomon. It examines key cases that affirmed this principle such as Lee v Lee's Air Farming and Macaura v Northern Assurance Co. The document also discusses statutory and common law exceptions to the principle. It analyzes relevant provisions in the Companies Act 2016 relating to the separate legal entity principle and circumstances where members/officers may be held liable for company obligations or debts.
The document discusses the concept of lifting or piercing the corporate veil. It begins by explaining that a corporate veil separates a company's actions from its shareholders' actions, protecting shareholders from liability. However, courts can lift the veil and hold shareholders liable depending on the facts of the case. It then provides examples of reasons why a court may lift the veil, including when a company is a sham or fraud, acts as an agent, violates public policy, or is formed to evade taxes. The document also discusses statutory provisions under which the veil can be lifted, such as having too few members, failing to refund application fees, misdescribing the company name, or fraudulent trading.
Complete Notes on Companies Ordinance, Paper LL.B. Part II.
.....................All students are advised to download and Prepare yourself. Shah Muhammad Zarkoon.
University Law College Quetta.
The document compares the advantages and disadvantages of three forms of business ownership: sole trader, partnership, and company.
Sole traders have fewer legal requirements but unlimited liability, while partnerships allow for more capital but partners have joint liability. Companies make it easiest to raise capital through shared ownership but establishing one requires more legal work.
This PPT covers meaning and definition of company, features of company, association of company, memorandum of Association, Articles of Association, Prospectus, Promoters
The document discusses the doctrine of lifting the corporate veil. It begins by explaining that a company is typically treated as a separate legal entity from its members. However, in some cases the veil can be lifted, such as to prevent fraud or injustice. The doctrine aims to look past the legal facade of a company and hold individual members liable. The document then discusses the history and application of the doctrine in both English and Indian law, providing various cases as examples. It also outlines specific provisions in Indian corporate law related to lifting the veil, such as for misrepresentation in a prospectus or fraudulent conduct of business.
The document discusses the history and provisions of company law in India. It notes that the first Indian company law was modeled after British law in 1850. The Companies Act of 1956 was a major law that was in place until 2013. The Companies Act of 2013 is now in force and applies to companies incorporated under previous acts as well as certain other business entities. The key characteristics of a company include separate legal identity, limited liability, perpetual succession, transferable shares, and a common seal.
The Companies Act of 1956 was introduced to regulate companies in India as the previous 1913 Act was seen as inadequate. It has since been amended several times, with the 1988 amendments being a major update based on recommendations of the Sachar Committee. The Act defines a company and sets out provisions around incorporation, memorandum of association, articles of association, types of companies, and prospectuses. It remains the primary law governing companies in India.
1) The document discusses two cases from Ghana that highlight how the courts have failed to protect creditors' rights by strictly applying the doctrine of separate corporate entity from the Salomon v. Salomon case.
2) In the first case, Majdoub & Co. Ltd. v. Bartholomew & Co. Ltd., a limited company was formed to take over the assets and liabilities of a partnership to avoid paying a debt, and the court did not consider this a fraud on the creditors.
3) In the second case, Grant v. Tikobo (Ghana) Ltd., a company sold its assets without creditors' knowledge to avoid a debt, and again the court did not protect the creditors
The document discusses the concept of separate legal entity, where a company is considered a separate legal person distinct from its owners and directors. It summarizes key cases that established this principle, including Salomon v A Salomon & Co Ltd, which determined that a company remains a separate legal entity even if it has a single shareholder. While this concept provides benefits like limited liability, it has also been criticized for enabling the avoidance of debts and potential for abuse. The document examines both sides of the separate legal entity debate.
The document is a response to an assignment question regarding the statement made in Salomon v Salomon regarding a company being a separate legal person from its members or shareholders.
The response provides a detailed analysis of the legal development of corporate personality since Salomon, noting that while courts are generally reluctant to pierce the corporate veil, there are exceptions where the veil may be lifted, including for fraud, improper conduct, or where the company is being used as a sham or alter ego. The response examines relevant case law and statutes in both Zimbabwe and other jurisdictions and concludes that while the separate legal personality principle remains intact, the law regarding lifting the corporate veil remains unsettled and applied on a case-by-case basis depending on the
The document discusses key concepts in company law, including:
- The concept of corporate personality established in Salomon v Salomon Co Ltd, which affirmed that a company is a separate legal entity from its owners or shareholders.
- The case of Lee v Lee's Air Farming Ltd extended this principle, finding that a person could be both an employee and employer of a company they control.
- Other topics covered include duties of company directors, protection of minority shareholders, and insider trading regulations.
The document provides background on Pakistan's Company Ordinance of 1984 and defines key terms in company law such as legal personhood and corporate personality.
The document discusses key aspects of the Companies Act 2013 including its structure, objectives, and applicability. It provides definitions of a company and outlines its key features such as separate legal entity, perpetual succession, limited liability, and status as an artificial legal person. It also discusses the concept of corporate veil which shields shareholders from liability, as established in the seminal Salomon vs Salomon case. Exceptions where the court may pierce the corporate veil include to determine the character of a company, protect revenue, avoid legal obligations, or in cases of fraud.
A company is a voluntary association formed for the purpose of business, with a separate legal identity from its members. It has characteristics like perpetual succession, limited liability for members, and a separate property owned in the company's name.
The case of Salomon v Salomon established that a company is a separate legal entity from its members, even if owned by one person. When Salomon transferred his business to a company owned by himself and family, the company's debts had priority over unsecured creditors in liquidation, showing its separate identity.
The corporate veil provides limited liability by separating the company and its members, but courts can lift the veil in cases of fraud, improper conduct, or to protect public policy or tax
Strong College Essays Admissions Essay, CollegMichelle Shaw
The document discusses the steps to get writing assistance from HelpWriting.net, including creating an account, completing an order form with instructions and deadline, and reviewing writer bids before selecting one and placing a deposit to start the assignment. Clients can then review the completed paper and request revisions if needed, with HelpWriting.net providing a refund if the paper is plagiarized. The process aims to ensure clients get original, high-quality content that meets their needs and satisfaction.
The document provides instructions for requesting writing assistance from an online service. It outlines a 5-step process: 1) Create an account with valid email and password. 2) Complete a 10-minute order form providing instructions, sources, and deadline. 3) Review bids from writers and choose one based on qualifications. 4) Review the completed paper and authorize payment if satisfied. 5) Request revisions until fully satisfied, with a refund option for plagiarized work.
The document provides instructions for using the HelpWriting.net custom writing service in 5 steps:
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Writing Letter Essay Transcript Vacation, PNG,Michelle Shaw
The document discusses the benefits of participating in policy debate. It explains that policy debate allows high school and college students to discuss ideas for solving societal problems. Many students are drawn to debate because they hope to learn skills that can help them enact real change. The document suggests that being part of the policy debate community can strengthen one's motivation to address issues in the world and give them experience thinking of solutions to problems.
Best College Essay Help What Are The Study Level AMichelle Shaw
The document discusses the different types of robots categorized based on their functions and
locomotion abilities. It describes stationary robots that do not move, wheeled robots that use wheels to
change positions, legged robots that move using legs and arms in complex ways, and vehicle robots
that can cover long distances using locomotive components. Examples provided include surgical
robots, military robots, household robots, and humanoid robots.
Modle Article Scientifique Word. Online assignment writing service.Michelle Shaw
The Nazi-Soviet Non-Aggression Pact of 1939 had significant consequences for the outbreak of WWII in Europe. Both Germany and Soviet Russia had strategic motivations for signing the pact, which gave them freedom to invade Poland and other countries. The pact was one of several factors that enabled the war, including the failed policy of appeasement and the inability of the League of Nations to ensure collective security.
Article Summary Example Ruang. Online assignment writing service.Michelle Shaw
The document provides instructions for requesting and obtaining writing assistance from HelpWriting.net. It outlines a 5-step process: 1) Create an account with a password and email. 2) Complete a 10-minute order form providing instructions, sources, and deadline. 3) Review bids from writers and select one based on qualifications. 4) Review the completed paper and authorize payment if satisfied. 5) Request revisions to ensure satisfaction, with the option of a full refund for plagiarized work.
Best Essay Website By Aiz. Online assignment writing service.Michelle Shaw
The document provides instructions for requesting and obtaining writing assistance from the website HelpWriting.net. It outlines a 5-step process: 1) Create an account with an email and password. 2) Complete a 10-minute order form providing instructions, sources, and deadline. 3) Review bids from writers and choose one based on qualifications. 4) Review the completed paper and authorize payment if satisfied. 5) Request revisions to ensure satisfaction, and the company offers refunds for plagiarized work. The summary aims to concisely outline the key steps involved in the writing assistance process according to the document.
006 Examples Of Introductory Paragraphs FMichelle Shaw
The document discusses ethics and its branches. The main branches covered are normative ethics, meta ethics, applied ethics, and descriptive ethics. Normative ethics examines how people ought to act morally. Meta ethics analyzes the meaning of right and wrong. Applied ethics focuses on applying moral knowledge to practice. Descriptive ethics describes what people view as right. The document also briefly discusses computer ethics, which examines ethical decision making for computing professionals.
Pin By Ariela On W R I T I N G Introductory Paragraph, EssaMichelle Shaw
This document provides instructions for requesting writing assistance from the website HelpWriting.net. It outlines a 5-step process: 1) Create an account with a password and email. 2) Complete a 10-minute order form providing instructions, sources, and deadline. 3) Review bids from writers and choose one based on qualifications. 4) Review the completed paper and authorize payment if satisfied. 5) Request revisions until fully satisfied, with the option of a full refund for plagiarized work.
The document discusses how to request writing assistance from HelpWriting.net, including creating an account, submitting a request form with instructions and sources, reviewing writer bids and choosing one to complete the assignment, revising the paper if needed, and being able to request revisions until fully satisfied with the work. The process aims to match clients with qualified writers and provide original, high-quality content through revisions or a refund if plagiarized.
Hilarious College Application Essay College Application EssayMichelle Shaw
This document provides instructions for using the HelpWriting.net service to have essays and assignments written. It outlines a 5-step process: 1) Create an account with a password and email. 2) Complete an order form providing instructions, sources, and deadline. 3) Review bids from writers and select one. 4) Receive the paper and authorize payment if satisfied. 5) Request revisions until satisfied, with a refund option for plagiarized work. The service aims to provide original, high-quality content through a bidding system and revision process.
Halloween Spooky Writing Paper Abcteach. Online assignment writing service.Michelle Shaw
The document provides instructions for creating an account on the website HelpWriting.net in order to request that a writer complete an assignment paper. It explains that the request will be sent to multiple writers who will bid on the project, and the client can then select a writer and pay a deposit to begin the assignment. The client will then receive the completed paper and can request revisions until satisfied before authorizing full payment.
The Literary Analysis Essay A TeacherS Guide Mud And Ink TeMichelle Shaw
The document provides a 5-step process for requesting an assignment to be written by the HelpWriting.net service:
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Top Writing Services Paper Writing Service, Writing ServicMichelle Shaw
The document discusses the process for getting writing help from the website HelpWriting.net. It involves 5 steps: 1) Creating an account with an email and password. 2) Completing an order form providing instructions, sources, and deadline. 3) Reviewing bids from writers and choosing one. 4) Reviewing the completed paper and authorizing payment. 5) Requesting revisions until satisfied, with a refund offered for plagiarized work. The service aims to provide original, high-quality content to meet customer needs.
How To Make A Review Paper. How To Format YouMichelle Shaw
The document provides instructions for creating an account on HelpWriting.net in order to request paper writing assistance. It outlines a 5-step process: 1) Create an account with email and password; 2) Complete an order form with instructions, sources, and deadline; 3) Review writer bids and choose one; 4) Review the paper and authorize payment; 5) Request revisions until satisfied. The service uses a bidding system and promises original, high-quality content with refunds for plagiarism.
Writing Papers In The Biological Sciences, 4 Th EMichelle Shaw
The document discusses Robert Nozick's theory of distributive justice, which argues that just holdings arise from just acquisition and transfer. However, the author argues that Nozick's theory should be rejected for two reasons. Specifically, the theory fails to adequately address issues of inequality that can arise from just transfers of holdings and does not sufficiently account for the need to rectify injustices.
Sample High School Essays. Online assignment writing service.Michelle Shaw
Total compensation, which includes both monetary and nonmonetary rewards, can positively or negatively impact an organization's effectiveness. Positively, linking pay to performance can motivate employees to increase productivity. Offering competitive total compensation can help attract and retain top talent. However, total compensation must align with employee needs and business goals. If not balanced properly, it can negatively impact employee attraction, motivation, and retention, preventing the organization from being effective.
Essay About Global Warming. Online assignment writing service.Michelle Shaw
The document provides instructions for creating an account and submitting an assignment request on the HelpWriting.net website in 5 steps: register with an email and password, complete an order form with instructions and deadline, choose a writer based on their bid, qualifications and reviews, place a deposit to start the assignment, and authorize final payment upon approval of the completed paper which can be revised for free.
No, it's not a robot: prompt writing for investigative journalismPaul Bradshaw
How to use generative AI tools like ChatGPT and Gemini to generate story ideas for investigations, identify potential sources, and help with coding and writing.
A talk from the Centre for Investigative Journalism Summer School, July 2024
Understanding and Interpreting Teachers’ TPACK for Teaching Multimodalities i...Neny Isharyanti
Presented as a plenary session in iTELL 2024 in Salatiga on 4 July 2024.
The plenary focuses on understanding and intepreting relevant TPACK competence for teachers to be adept in teaching multimodality in the digital age. It juxtaposes the results of research on multimodality with its contextual implementation in the teaching of English subject in the Indonesian Emancipated Curriculum.
How to Install Theme in the Odoo 17 ERPCeline George
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Lecture_Notes_Unit4_Chapter_8_9_10_RDBMS for the students affiliated by alaga...Murugan Solaiyappan
Title: Relational Database Management System Concepts(RDBMS)
Description:
Welcome to the comprehensive guide on Relational Database Management System (RDBMS) concepts, tailored for final year B.Sc. Computer Science students affiliated with Alagappa University. This document covers fundamental principles and advanced topics in RDBMS, offering a structured approach to understanding databases in the context of modern computing. PDF content is prepared from the text book Learn Oracle 8I by JOSE A RAMALHO.
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Main Topic : DATA INTEGRITY, CREATING AND MAINTAINING A TABLE AND INDEX
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Target Audience:
Final year B.Sc. Computer Science students at Alagappa University seeking a solid foundation in RDBMS principles for academic and practical applications.
About the Author:
Dr. S. Murugan is Associate Professor at Alagappa Government Arts College, Karaikudi. With 23 years of teaching experience in the field of Computer Science, Dr. S. Murugan has a passion for simplifying complex concepts in database management.
Disclaimer:
This document is intended for educational purposes only. The content presented here reflects the author’s understanding in the field of RDBMS as of 2024.
Feedback and Contact Information:
Your feedback is valuable! For any queries or suggestions, please contact muruganjit@agacollege.in
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Principles of Rood’s Approach
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Facilitatory techniques
Inhibitory techniques
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Covers degrees offered, program details, tuition, financial aid and the application process.
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(𝐓𝐋𝐄 𝟏𝟎𝟎) (𝐋𝐞𝐬𝐬𝐨𝐧 𝟏.𝟎)-𝐅𝐢𝐧𝐚𝐥𝐬
Lesson Outcome:
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we may assume that God created the cosmos to be his great temple, in which he rested after his creative work. Nevertheless, his special revelatory presence did not fill the entire earth yet, since it was his intention that his human vice-regent, whom he installed in the garden sanctuary, would extend worldwide the boundaries of that sanctuary and of God’s presence. Adam, of course, disobeyed this mandate, so that humanity no longer enjoyed God’s presence in the little localized garden. Consequently, the entire earth became infected with sin and idolatry in a way it had not been previously before the fall, while yet in its still imperfect newly created state. Therefore, the various expressions about God being unable to inhabit earthly structures are best understood, at least in part, by realizing that the old order and sanctuary have been tainted with sin and must be cleansed and recreated before God’s Shekinah presence, formerly limited to heaven and the holy of holies, can dwell universally throughout creation
The Jewish Trinity : Sabbath,Shekinah and Sanctuary 4.pdf
2.5 Lifting Of Corporate Veil
1. 2.5 Lifting of Corporate Veil
The term “Lifting of Corporate Veil” means ignoring the separate legal entity of the company,
and looking in to the realities. It is an important doctrine in the company law according to which
in certain circumstances, the separate legal entity of the company is not taken in to the account.
The company and its members are treated as one person.
We know the chief characteristics of a company is that it is a separate legal entity independent
and different from its members. And also to this characteristic, many other advantages are
enjoyed by the company. The fact is not denied that, by fiction of law, a company is a separate
legal entity, independent and different from its members. But in reality, it is an association of
persons, who are in fact the beneficial owners of all the corporate property (i,e, companies
property ). As a matter of fact, the business of a company is carried on by some human beings
who are the ultimate beneficiaries of corporate advantages. Due to separate legal entity of the
company, these real beneficiaries behind the company are disregarded once they have formed a
company and given to their association the status of legal entry.
Ordinary, the separate legal entity of the company is to be respected. As a matter of fact, the
whole law of corporation is based on the principle of corporate personality ( i e, separate legal
entity ) of a company. However, the statutory privilege of separate personality of the company
must be used for legitimate business purpose only. Sometimes, it becomes necessary to find out
the real person who control the company e.g., in case when this corporate personality (legal
entity) of the company is misused for fraudulent or improper conduct or for doing things against
public policy. In such cases, the courts ignore the separate entity. In other words, the corporate
veil of the company probed into and lifted up. This however, is the discretionary power of the
court, and will depend upon the underlying social, economic and moral factors as they operate in
and through the company. When the corporate personality of a company is used as a shield to
cover its wrong doings, such as for evasion of tax, the court may lift the corporate veil.
[(BSN (UK) Ltd. v . Janardan M. Rajan Pillai. (1996) 86 Comp. Cas 371 (Bombay)]
The cases, in which the corporate veil is lifted i.e , the separate legal entity of the company is
ignored, may be discussed under the two heads namely:
2. 1. Judicial interpretations
2. Express statutory provisions
2.6Lifting of corporate veil under judicial interpretations
Following are some of the judicially decided cases in which the corporate veil is lifted i.e , the
separate legal entity of the company is ignored:
1. Determination of character of the company: Sometimes, it becomes necessary to
determine the character of a company e.g., to see whether it has assumed as enemy
character. The doubts may arise that the company is owned and controlled by the enemies
of the country. In such cases, the court may lift the corporate veil (i.e., ignore the separate
entity of the company) and examine the character of the persons who are in real control
of the company affairs. As a matter of fact, the lifting of the corporate veil in such cases
is necessary because trading with an enemy is against the public policy.
EXAMPLE 2.12, A company was incorporated in England for the purpose of selling
tires manufactured in German Company. The bulk of the shares in English Company
were held by the German company. And the remaining shares (except one) were held by
the German residing in German. Thus, in fact, the real control of the England Company
was in German hands during the First World War, the English company brought legal
actions to recover the trade debts. The question arose whether the English company had
become an enemy company and, therefore, should not be allowed to proceed with the
action. It was held that the company has assumed an enemy character, and was debarred
from maintaining the action i.e., it it was not allowed to proceed with the action.
[Daimler Co. Ltd. v. Continental Tyres Rubber Co. (1916) 2 AC 307]
In the above case, the following observations of the House of Lords are worthnoting:
“Company is not a natural person with a mind or conscience. It can be neither loyal nor
disloyal. It can be neither friend nor enemy. But it may be assume an enemy character
when persons in the facto control of its affairs, are residents in any enemy country, or
wherever resident, are acting under the controls of enemies.”
3. 2. Protection of revenue: Sometimes, the lifting of corporate veil is necessary for the
benefit of revenue, e.g., where the separate entity of the company (i.e corporate entity) is
used for the evasion of tax. In such cases, the court may lift the corporate veil (i.e., ignore
the separate entity of the company), and the incomes of the company and its members
may be taxed as that of one person.
EXAMPLE 1.13. A, assessee, was a wealthy man receiving huge dividend and interest
incomes. He formed four companies and transferred his investments (from which he was
receiving dividends and interest income) to these companies. Thereafter, the income
received from A’s investments are credited to the accounts of companies, but the
companies handed back the same to A as a pretended loan. In this way, A dividend has
income into four parts, and reduce his tax liabilities. It was held that the companies were
formed by A purely and simply as a means of avoiding his tax liabilities., and the
companies were nothing more than the assessee himself. In this case, the companies were
created as legal entities simply, for the purpose of receiving the dividends and interest
from A’s investments, and then handling over the same to him (A) as pretended loan.
[Re Sir Dinshaw, Maneekjee Patil, AIR 1927 Bombay371]
It may, however be noted that the members themselves are not allowed to claim that they
should be regarded as economically identical with the company, particularly when this is
not in the interest of justice.
EXAMPLE 2.14., A was a shareholder of tea company. Under the Income Tax Act then
in force, the income of the tea company was exempted from tax up to 60% as
agricultural income, and 40% was taxed as income from manufacture and sale of tea. A
received certain amount as dividend in respect of the shares held by him in the company.
He claimed that this dividend income should be regarded as agricultural income up to
60% and should be exempted from tax. It was held that although the income in the hands
of the company was particularly agricultural, but the same when received by the
shareholders could not be regarded as agricultural income.
4. [Bacha F. Guzdar v. The Commissioner of income Tax, Bombay, AIR 1955 SC 74]
3. Protection of companies own justified interest: Sometimes, a company, itself, wants
that its separate entity should be ignored and treated alike with the members. In such
cases, the court may lift the corporate veil i.e., ignore the separate identity of the
company if it is in company’s own interest. Thus, the corporate veil may be lifted for
company’s own benefit if the court thinks it to be justified. The Honourable Supreme
Court of India has taken this view in a case, which is illustration below;
EXAMPLE 2.15, A firm of transporters was a tenant in the premises belonging to A, the
landlord. After sometime, certain differences arose among the partners, and consequently
the firm was split up into two firms. Each firm agreed to operate in the area allocated to
it, and a condition was attached that one firm could not enter upon the area of the other.
In the course of time, one of the firms floated a private limited company. Both, the firm
and the company had their offices in the same premises in which the original firm was a
tenant. The landlord of the premises filed an eviction petition (i.e., for vacation of the
premises) against the original firm of the ground that it hand handed over (i.e., sublet or
assigned) the possession of the premises to a private limited company, which is a separate
legal entity, without obtaining his (landlords) consent. And thus, there is a violation of
the premises by the firm of the company. The Supreme Court observed that the company,
thought a separate legal entity, was in fact a creature of the partners of the firm and was
the very image of the firm. The limited company and the partnership firm were two only
in name but one for practical purposes. There was substantial identity between the limited
company and the firm.
[Madras Bangalore Transport Co, (West) v. Inder Singh, (1986) 3 SCC 62)
Thus, in this case, the court ignored the separate legal entity of the company. It, therefor,
follows that lifting of corporate veil is not always to the disadvantages of the company’s
promoters. In New Horizons Ltd. v. Union of India, (1995) I SCC 478 ; (1997) 89 Comp.
Cas. 849 (SC), the Supreme Court has gain upheld this view. In this case, the court lifted
the veil and held that where the joint – venture sponsers of the company were qualified
5. for participating in a government tender, their company should also be treated as a
qualified tenderer.
4. Avoidance of legal obligations imposed by welfare legislation: Sometimes, it appears
to the court that the company is formed just to avoid the legal obligations imposed by a
welfare legislation. In such cases, the court may lift the corporate veil i.e., ignore the
separate entity of the company. e.g., where in order to reduce the liability to pay bonus to
its workers, the company splits up its profits by creating another company, the court may
refuse to recognise the new company. In fact, the legislation requiring the payment of
bonus to workers is for the welfare of the workers, and the company should not be
allowed to escape liability imposed by such legislation. The avoidance of welfare
legislation is as common as avoidance of taxation, and the approach of the court in
considering problems arising out of such avoidance has necessarily to be the same as
avoidance of taxation. This has been recognized by the Supreme Court as a evident from
the following example.
EXAMPLE 2.16, A company was earning handsome profits, and therefore its liability to
pay bonus was also high. In order to split up the profits into two hands and thereby to
reduce its liability to pay bonus to the workers, the company created another company as
its subsidiary, and transferred some of the investments and securities for the new
company. The Supreme Court held that the purpose of working out of the amount of
bonus payable by the former company to its workers, the separate existence of the new
company would be disregarded. The Court observed as under;
“If we look at the facts of the case, what do we find? A company is credited wholly
owned by the principle company with no assets of its own except those transferred to it
by the principle company, with no business or income of its own except receiving
dividends from shares transferred to it by the principal company and serving no purpose
whatsoever except to reduce the gross profits of the principal company”.
[Workmen of Association Rubber Industries Ltd. v. Association Rubber Industry Ltd.,
(1986) 59 Company Cases 134 (SC) : AIR 1986 SCI]
6. 5. Avoidance of contractual obligation: Sometimes, a company is formed simple to avoid
the obligations arising out of contracts. In such cases, the court may lift the corporate veil
i.e., ignore the separate entity and decide the case assuming that no company is in
existence.
EXAMPLE 2.17. A and B were carrying on an auto parts business in partnership. They
sold their business to C and agree not to start a competitive business for two years.
Immediately thereafter, they (i.e., A & B) wanted to start the similar business. In order to
avoid the contractual obligation of not to start a similar business for two years, they
formed a private limited company, became the major shareholders and directors, and
started the similar business. In this case the court may ignore the separate entity of the
company and restrain it from starting the similar business. Here, it is clear that the
company has been formed by A and B simple to avoid their contractual obligation with
C.
6. Prevention of fraud or improper conduct: Sometimes, it appears to the court that the
company is formed for some fraudulent or improper purpose e.g., to defraud creditors, to
avoid legal obligations, or to defeat the provisions of law. In such cases, the court may
lift the corporate veil i.e., ignore the separate entity of the company. Thus, where the
company is a mere sham i.e., formed to deceive or defraud, the court will lift the
corporate veil and look into the ownership of the company.
EXAMPLE 2.18, A borrowed a huge amount of money in his own name from B and
Co., a finance company. He formed three different companies, and invested the entire
money borrowed from B & Co. in these companies. The members of these companies
were A and his son only. When the loan was not repaid, B and Co. filled a suit for the
recovery of the loan amount, and also sought it to be recovered out of the assets of the
companies. It was held that the amount can be recovered out of the assets of the
companies as these were credited only to deceive the creditor i.e., leading company.
[See P.N.B. Finance v. Shital Pd. Jain, (1983) 54 Company Cases 66 (Delhi)]
7. EXAMPLE 2.19, A was appointed as managing director of B and Co. A’s appointment
was on the condition that “he shall not at any time while he shall hold the office of a
managing director or afterwards, solicit or entice away the customers of the company”.
His employment was terminated under an agreement. After sometime, he formed a
company to carry on his own business. The company formed by A started soliciting and
enticing away the customers of B & Co. The company was formed by A merely to avoid
the breach of agreement with B & Co. under which agreed not to entice away the
customers of B & Co, as he himself was not allowed to solicit the customers. It was held
that the company formed by A was a mere sham (or cloak) formed for the purpose of
enabling him to solicit the customers of B & Co. In fact, A’s company was a mere
channel used by him for the purpose of enabling, for his own benefit, to obtain the
advantages of customers of B & Co. In this case, A and his company was restrained from
carrying on the business.
[Gilford Motor Co. v. Horne, (1933) I Ch.935]
EXAMPLE 2.20, A agreed to sell his certain land to B. But subsequently he changed his
mind. In order to avoid the specific performance of the agreement to sell land to B, A
formed a company, and sold his land to this company. B filed a suit against the company
formed by A and also against A for specific performance of the agreement under which A
had agreed to sell the land to B. The court looked into the reality of the situation, and
treated the company as a mere sham. The transfer (i.e., sale) of land to the company was
ingnored and the land was ordered to be sold to B as already agreed between A and B.
[Jones v. Lipman, (1962) All. E.R. 342]
In a case before the Supreme Court, a company created a subsidiary company and
transferred its investment holding to the subsidiary with a view to reduce its liability to
pay bonus to its workers. In this case, the Supreme Court ignored the separate existence
of the subsidiary company.
[Workmen v. Associated Rubbers India Ltd. (1985) 4 SCC 114]10
8. 7. Company acting as an agent of its members or of another company: Sometimes, a
company acts as an agent or trustee of its members or another company. In such cases,
the court may lift the corporate veil (i.e., ignore the separate entity of the company), and
the principal (i.e., for whom the company acts) may be held liable for the acts of the
company. Whether the company is acting an agent or not is a question of fact, and
generally the courts insist upon very strong evidence to prove this fact. Thus, the
relationship of agency should be substantively established to enable the court to lift the
corporate veil.
EXAMPLE 2.21, A, an American company, produced a film in the name of B, a British
company, in order to avoid certain technical difficulties. The British company (B) had a
total capital of 100 shares out of which 90 were held by an American director of the
company. All the funds of the British company for production of the film were provided
by the American company. The film produced in the name of British company was
sought to be registered as an English Film. The court upheld the decision of the Board of
Trade of Films. In this case, the separate entity of the British company was ignored, and
the court observed that it acted merely as an agent and nominees of the American
company for producing the film.
[In Re F.G. (Films) Ltd. 1953 I WLR 483; (1953) I All ER 615 (Ch, D.)]
8. Holding and Subsidiary company relationship: A holding company is one, which has
control over another company. And the company, over which the control is exercised, is
called a subsidiary company. Sometimes, the holding company completely controls and
dominates the activities of its subsidiary company in such a way that the latter becomes
purely an agent of the holding company. In such cases, the court may lift the corporate
veil and consider the subsidiary company a part and parcel of the holding company. Thus,
where the facts and circumstances show that the holding as well as its subsidiary
company may be ignored by the courts. In the following circumstance, the corporate veil
may be lifted, and the holding company and its subsidiary as a whole may be held liable
for the debts and other liabilities of either or both of such companies.
10. [Smith Stone & Knight Ltd v. Brimingham Corpon., (1936) KB 116]
The lifting of corporate veil in cases of holding and subsidiary company relationship has
also been approved by the Supreme Court in a recently decided case of State of U.P. &
Others v. Renusagar Power Co. & others, AIR 1988 SC 1737 ; (1991) 70 Comp. Cas. 127
(SC). The following example is based upon the facts of this case.
EXAMPLE 2.23, A & Co. Ltd was formed for the manufacture of aluminium. Another
company, B & Co Ltd was form for generating electricity which was to be wholly
supplied to A & Co Ltd to be used in the manufacture of aluminium. B & Co Ltd was
wholly owned subsidiary of A & Co Ltd, and was completely controlled by it ( A & Co
Ltd). Under the local laws of the State, the ‘electricity duty’ was imposed on the
electricity consumed by the consumers. However, in case of electricity consumed from
one’s own source the rate of electricity duty was less as compared to other cases. The
Supreme Court held that the corporate veil should be lifted and A & Co Ltd and B & Co
Ltd . should be treated as one concern. And B & Co Ltd’s., power plant must be treated
as the ‘own source of generation’ of A & Co Ltd., and should be liable to electricity duty
on that basis. The court also observed that the persons generating and consuming the
energy were the same, and thus the consumption of energy by A & Co Ltd, was clearly
the consumption by it from its ‘own source of generation’.
In Mehra (UK) v. Union of India, 1997 (88) Comp, Cas, 213 Delhi, the High Court has
also held that a parent company and its subsidiary are usually treated as one economic
entity.
9. Dummy Companies: Sometimes, a company formed by certain persons is not intended
to be a corporate body i.e., a separate legal entity. It is formed simple to carry on their
own personal business. In such cases, the court may lift the corporate veil, if it appears
that the separate entity of the company is being misused.
EXAMPLE 2.24, A was carrying a jewellery business. He formed a company with
himself and his wife as the only members. No business was taken over by the company.
Only a banking account was opened in the name of the company in which A deposited a
small amount. A was carrying on his business exactly in the same manner in which he
11. was doing prior to the formation of the company. The company has practically no asstes.
B, a customer, entrusted some jewellery with A for ornamentation, which was stolen
from his custody. B files a suit against A for the recovery of the value of the jewellery. A
contended that the jewellery was delivered to him in his capacity as a managing director
of the company, and thus he could not be held personally liable. The court ignored the
separate entity of the company formed by A, and he was held personally liable for the
value of the jewellary entrusted to him.
[Hurwitz v. Berman, The time, October 29, 1932]
10. Prevention of Fraud upon public: Sometimes, a company commits a fraud upon the
public and the people suffer financial loss due to the company’s such fraudulent act. In
such cases, the court can lift the corporate veil so as to expose any person to liability who
have committed a fraud upon the public from their sheltered position.
EXAMPLE 2.25, A construction company advertised a scheme for booking of flats.
Many people deposited their hard earned money with the company under the scheme.
The scheme was operated with utter dishonesty and fraud, and no flat was given under
the scheme. In this way, a large number of persons were deceived by the company. Here,
the persons playing such fraud, though in the name of a company, can be held personally
liable to public.
[See Delhi Development Authority v. Skipper Constructions (P) Ltd 1997 89 Comp. Cas.
362 (SC)]
In Ali Javed Ameerhasan Rizvi v. Indo French Biotech Enterprises Ltd, (1995) 95 Comp,
Cas, 373 (Bombay), the Bombay High Court has also held that the corporate veil can be
lifted where large number of investors were being defrauded by persons in charge of the
companies by employing the corporate veil. In this case the promoters promised
unattainable high return to the tune of 1025% on investments, diverted the so collected
funds to the firms of directors or their relatives. In this way the promoters defrauded
innocent investors by employing the corporate veil. The High Court lifted the corporate
veil to do justice to the investors.
12. 11. Misuse of exemptions given by the government: Sometimes, Certain exemptions are
given by the government to a particular sector such as to small scale industries, which are
misused by forming a company to carry on small scale industry. In such cases, the court
may lift the corporate veil to known whether or not such company is entitled to
exemptions. Thus, where small scale industries were given certain exemptions, and a
company was owning a small scale industry, the court held that it was permissible to lift
the corporate veil in order to know whether or not such company was subsidiary of
another company. Such a company would not be entitled to the proposed exemtions if it
was shown that it was a subsidiary of another company.
[Inalsa Ltd v. Union of India, (1996) 87 Comp. Cas. 599 (Delhi)]
Thus, in appropriated cases, the court may disregard the separate entity of the company
and lift the corporate veil i.e., look behind the legal person to know the actual position.
So far we have discussed some of the circumstances under which the corporate veil may
be lifted i.e., the separate legal entity of the company may be ignored. It may be noted
that though the separate entity of the company is ignored, but it does not mean that the
company ceases to be an independent legal entity. As a matter of fact, legal status of the
company is not denied, it is only ignored where the company attempts to misuse the
same. As regards the ture legal position of a company and the circumstances in which its
separate legal entity will be ignored, the following observation of the Supreme Court are
worthnoting;
1. The true legal position in regard to the character of a corporation or a company,
which ows its corporation to a statutory authority, is not in doubt or dispute. The
corporation in law is equal to a natural person and has a legal entity of its own.
The entity of the corporation is entirely separate from that of its shareholders; it
bears its own name and has a seal of its own; its assets are separated and distinct
from those of its members; it can sue and be sued exclusively for its own purpose;
its creditor cannot obtain satisfaction from the assets of its members; the liabilities
of the members or the shareholders is limited to the capital invested by them;
similar the creditors or the members have no rights to the assets of the
corporation. The position is well established ever since the decision in the case of
Salomon v Salomon & Co., 1897 AC 22 was pronounced in 1897 and indeed, it
13. has always been the well recognized principle of common law. However, in
course of time, the doctrine, that a corporation or company has legal and separate
entity of its own has been subjected to certain exceptions by the application of the
fiction that the veil of the corporation can be lifted and its face examined in
substance. The doctrine of the lifting of the veil thus marks a change in the
attitude that law had originally adopted towards the concept of separate entity or
personality of the corporation. A a result of the impact of complexity of the
economic factors, judicial decisions have some time recognised, exception to the
rule about juristic personality of the corporation”.
[Tata Engg. & Locomotive Co. Ltd v. State of Bihar, AIR 1965 SC 40]
2. “It is true that from the juristic point of view, the company is a legal personality
entirely distinct from its members, and the company is capable of enjoying rights
and being subjected to duties which are not the same as those enjoyed or borne by
its members. But in certain exceptional cases, the court is entitled to lift the veil of
corporate entity and to par regards to the economic realities behind the legal
façade”.
[C.I.T. v. Sri Meenakshi Mills Ltd., (1967) 63 ITR 609 (SC)]
2.7. Lifting of Corporate veil under express statutory Provisions (Liability of Directors and
members)
We have discussed in the last article, that in certain cases the court may lift the corporate
veil (i.e., ignore the separate entity of the company), and deal directly with the persons
(members) behind it. The Companies Act, itself, also provides certain cases in which the
directors or members of the company are held liable. It may, however, be noted that in these
cases the separate entity of the company is not ignored i.e., independent existence of the
company is maintained. The only point is that the directors or members are also held personally
liable along with the company. Thus, the distinction between the lifting of corporate veil under ‘a
judicial interpretation’ and under ‘express statutory provisions’ is that, in the former the separate
14. entity of the company is ignored. But in the latter the separate entity of the company is
maintained with the exception that the persons behind it are also held personally liable.
Following are the main provision, where the members are personally liable:
1. Reduction of membership below statutory limit: The Company must have a minimum
number of members as provided in the Companies Act. The statutory minimum limit of
members is two in case of a ‘a private company’, and seven in case of a ‘public
company’. If at any time the number of members of a company is reduced below this
statutory limit and the company carries on business for more than six months with
reduced members, then every member which is aware of this fact, shall be jointly and
severally liable for all the debts of the company which were contracted during the period
[Section 45]. It may be noted that the personal liability of the members starts after six
month of carrying on business with reduced members. Moreover, the liabilities is only for
debts contracted after these six months.
EXAMPLE 2.26, A, a public company, was carrying on T.V. manufacturing business.
On 1.1.98, the membership of the company was reduced to six. But the company
continued the business with the six members. On 1.12.98 the company took a loan of 12
lacs from a Bank. Subsequently, due to depression in trade the company went in
liquidation, and the company assets were not sufficient to pay its out standing liabilities.
In this case, the members are personally liable for the repayment of the laon. The reason
for the same is that after the reduction in membership, the companys’ business was
continued for more than six months, and the loan was also contracted after six months.
EXAMPLE 2.27, A, B and five others were the only members of a public limited
company each holding fully paid u shares. On 1.1.98, B’s shares were sold in court
auction, and A purchased them. Thereafter, the company continued its business, and on
15th
Dec. 1998 the company borrowed 10 lacs from a financial corporation. In this case,
the members shall be personally liable for the loan obtained on 15th
Dec. 1998.The reason
for the same is that after the purchased of B’s share by A, the company’s membership is
reduced from seven to six, and the company its business for more than six months after
the reduction in membership.
15. 2. Misdescription of company’s name: The name of the company should be properly
described (i.e., in legible character) in all business communication. Moreover, the name
should also indicate that the acts are done on behalf of the company. If the name of the
company is properly not used, and there is no indication that the acts are done on behalf
of the company, then the persons, who have actually done the act, will be personally
liable [Section 147]
EXAMPLE 2.28, A was a director of a company named AB Agencies Ltd. He signed a
cheque on behalf of the company mentioning company’s name as A & B Agencies. In
this case, the name of the company is not properly described, and thus A will be
personally liable to pay the amount of the cheque.
[See Hendon v. Adelman, (1973) New LJ 637]
Similarly, where a bill of exchange is drawn upon a company, but a director accepts a bill
of exchange in his personal capacity (i.e., there is no indication that the bill of exchange
is accepted in behalf of the company), then he will be personally liable to pay the amount
due on the bill of exchange.
3. Fraudulent conduct of business: The members of the company are also personally
liable for fraudulent conduct of the company’s business [Section 542]. Sometimes, in the
course of winding up, it may appear that the business of the company has been carried on
with the intention to defraud creditors of the company or any other person, or for any
fraudulent purpose. In such cases, the Tribunal* may declare that the persons who were
knowingly parties to such business shall be personally responsible for such debts of the
company as the Tribunal* may direct. The Tribunal* may declare such personal liability
on the application made by the liquidator, or any creditor or contributory of the company.
Note: On the Commencement of winding up proceeding, the shareholders of a company are
called contributories [Section 426 of the Companies Act]
EXAMPLE 2.29, A was a furniture manufacture and his business was is sound condition.
He formed a company and transferred his business to the company formed by him. The
members of the newly formed company were A and his other family members. A himself
became the managing director of the company. A’s early business transferred to his company
16. 1,00,00. In payment of this consideration A took 4000 shares of 10 each, and debntures
worth 30,000. These debentures imply that the company owed 30,000 and for the repayment
of this, a charge was created in A’s favour on the assets of the company. Due to trade
depression, the company was involved in financial difficulties, and it was heavily indebted
and was unable to pay its debts. Knowing this position of the company A purchased, on
credit, raw material (timber) worth 50,000 for the company. Soon thereafter, the company
went it to liquidation. After paying the debts of A as secured creditor, nothing was left for the
other unsecured creditors. In this case, the separate legal entity of the company may be
disregarded, and A may be held liable for the debt of 50,000 which was incurred by him
knowing the fact that the company was already heavily indebted. The following judicial
observation are worthnoting in this regard:
“ If a company continues to carry on business and to incur debt at a time when there
is to the knowledge of its directors, no reasonable prospect of the creditors ever receiving
payments of those debts, it is, in general, a proper inference that the company is carrying on
business with intent to defraud creditors”.
4. Mis-statement in the prospectus: A ‘prospectus’ , is a document issued by the company
inviting offers from the public for the purchased of its shares or debentures, or to invest
money with the company. The prospectus must, therefore, represent to the public the true
fact relating to the affairs of the company. If the prospectus contains any mis-statement
(i.e., untrue statement), then every director, promoter of the company, and every person
who authorized the issue of prospectus, shall be liable to pay compensation to the
subscriber (i.e., who purchases shares or invests money in the company) for any loss
sustained by him by reason of any untrue statement contained in the prospectus [Section
62]. Thus, the directors, promoters etc., incur personal liability for the issue of false
prospectus. Moreover, they are also liable for damages for deceit under the law of torts
(i.e., for civil wrong)
EXAMPLE 2.30, The directors of the company issued a prospectus inviting subscription
for debentures. The prospectus stated that the objects of loan (i.e., issue debentures) were
to complete alterations in the building of the company, to purchases horses and van, and
17. to develop the trade of the company. But in fact, the real object of the loan was to enable
the directors to pay off the old liabilities. Relying upon the statement contained in the
prospectus, A advanced some money to the company. Soon thereafter, the company went
into liquidation and A filed a suit against the directors for damages for fraud. It was held
that the directors were liable to pay damages. The court observed that “a man who lends
money reasonably wishes to know for what purpose it is borrowed, and he is more
willing to advance if he knows that it is not wanted to pay off the liabilities already
taken”.
[Edgington v. Fitzmaurice, (1885) 29 Ch, D. 459)]
5. Failure to repay application money: The application money is that which is paid to the
company along with the application for the purchased of its shares. As a matter of fact,
the persons desirous of purchasing the shares of the company, submit their applications to
the company, along with the application money. If the allotment of shares is not made by
the company, then the application money must be repaid to the applicants within 130
days after the issue of prospects. And if the application money is not repaid within this
period, then the directors of the company shall be personally liable to repay the
application money along with the interest at the rate of 6% from the expiry of 130th
day
[Section 69(5)]. However, a director may escape his liability if he proves that the default
in repayment of money was not due to the misconduct or negligence on his part.
Note: The allotment of shares is not made by the company unless the conditions of allotment
are fulfilled. The conditions of allotment will be discussed in Art, 7.12.
6. Directors with unlimited liability: Generally, the liability of the directors of a limited
company is limited like the other members of the company. However, the memorandum
of the company may contain a provision that the liability of the directors shall be
unlimited. It may be noted that either the memorandum may originally contain such
18. provision, or it may be subsequently altered by passing a special resolution, so as to make
directors’ liability unlimited. However, the memorandum may be altered only if the
company is so authorized by its articles of association [Section 322, 323]. In case of
unlimited liabilities of directors, they shall be personally liable for the debts of the
company.
7. Non-payment of income tax: Sometimes a private company is wound up, and the
income tax is respect of its any income of any previous year is unpaid. In such cases,
every person who was a director of the company at any time during the relevant precious
year shall be personally liable for the payment of the income tax. It may be noted that the
unpaid tax may be assessed before the winding up, in the course of winding up, or after
the winding up of the company. The directors will remain liable for the payment of the
same in all such cases.
8. Liability for pre-incorporation contracts: A pre-incorporation contracts is one which is
entered in to i.e., made, by the promoters before the formation of the company.
Sometimes, after the formation of the company, it does not adopt (accept) the pre-
incorporation contracts. In such cases, the promoters are personally liable for all such
contracts which are not adopted by the company after its formation.
Note: Pre-incorporation contracts and promoters’ liability for the same will be discussed in
detail in Arts, 3.15 and 3.16.
9. Ultra virus acts: The ultra vires acts are those which are not the authorized acts i.e.,
which are beyond powers. The directors of a company are personally liable for all the
ultra vires acts even if they are done on behalf of the company. The ultra vires acts may
be grouped into two categories, namely;
19. (a) Acts ultra vires company.
(b) Acts ultra vires directors.
The directors are also personally liable for the acts which are in the nature of tort (i.e., civil
wrong)
Note: the ultra vires acts will be discussed in detail in Art. 4.20.
10. Group accounts of holding and subsidiary companies: We know that a holding
company is one which has control over another company. And the company over which
the control is exercised, is called the subsidiary company. In certain cases, a subsidiary
company may lose its separate identity to some extent e.g., where both the holding and
subsidiary companies are required to present the joint picture of their state of affairs (i.e.,
group accounts) , the separate identity of the subsidiary company is disregarded. The
provisions in respect of the group accounts are primarily designed to give better
information, of the account and financial position of the group as a whole, to the
creditors, shareholders and the public. Sometimes, the court may also treat the subsidiary
company as an agent of the hiding company.
2.8.Refusal to lift the corporate veil
We have discussed, in Art, 2.5, the cases in which the corporate veil is lifted i.e., the
separate entity of the company is ignored by the courts. As a matter of fact, the purpose of
lifting the veil, in those cases, is to prevent the misuse of corporate entity by the companies.
It is to be noted that the lifting of the corporate veil may also be refused by the courts where
the lifting of the veil itself is sought to be misused. For example, where the lifting of veil
would not be in the interest of Government revenue or national interest etc. Thus, in these
cases, the separate entity of the company is generally maintained by the courts even if it is
sought to be ignored. Following are the judicially recognized cases in which the court have
refused the lift the corporate veil i.e., the separate entity of the company is maintained:
20. 1. Protection of revenue: Sometimes, the separate entity is sought to be ignored for the
purpose of escaping i.e., avoiding the liability to pay the tax, such as property tax,
income tax etc. In such cases, the court may refuse to lift the corporate veil, and
separate entity of the company may be maintained.
EXAMPLE 1.31, The entire capital of the company was held by the Government of
India. Under the law then in force, the buildings and lands owned by or vested in the
Union of India were exempted from property tax. On this ground, the company
sought the exemption from the payment of property tax and contented that the land
and the building of the company was property of the Government as entire share
capital of the company was held by the Government of India. The court refused to
accept the contention of the company and held that the company was a separate legal
entity and that the land and building owned by the company were the property of the
company itself and not of the Government of India. Thus, the company was held
liable to pay the property tax.
[Western Coalfield Ltd v. Special Area Development Authority, AIP 1982 SC 697]
Thus, for the protection of revenue, the court may refuse to lift the corporate veil even if asked
by the company itself. The decision of Supreme Court in the case of Bacha F. Guzdar discussed
in Example 2.14 is also relevant on the point.
2. National Interest: Sometimes, the maintenance of the separate legal entity of a
company is necessary in the interest of the nation. In such cases, the court may refuse
to lift the corporate veil, and the separate entity of the company may be maintained.
Thus, where the lifting of the corporate veil will go against some national policy, the
court will not do so.
EXAMPLE 2.32, A group of 13 companies, incorporated abroad, separate applied
for permission under the Foreign Exchange Regulation Act, 1973 (FERA) for
purchases of the shares of an Indian company. The FERA encouraged the flow of
such investments from non-resident Indians and from the companies belonging to
them. However, the Act also imposed a ceiling on such investment so that this
21. privilege may not be used to destabilize the Indian Companies. It was prayed before
the Supreme Court that all the 13 companies belonged to one family trust which was
operated by a single person, and the purchase of shares in the name of 13 persons
was in fact by a single person, and therefore ceiling imposed by FERA was violated.
The Supreme Court did not accept this argument, and refused to lift the corporate
veil i.e., all the 13 companies were considered separate and independent for the
purpose of FERA is to attract investment by non-resident Indians. The lifting of
corporate veil would go against that policy and the national interest because it would
discourage the flow of investment by non-resident Indians.
[L.I.C, v. Escorts Ltd. (1986) I SCC 264]
3. Government Companies: A government company is one which majority of the
shares are held by the Central Government or the State Government or by both of
them. In case of such companies where almost all the shares are held by the
Government, the courts generally refuse to lift the corporate veil i.e., the company is
treated as a separate legal entity and not the part of the Government itself.
EXAMPLE 2.33, A government company contended that it cannot be subjected to
development tax, as it is not a separate entity but a part of the Government itself. The
court refused to lift the corporate veil as requested by the company, and regarded the
Government company to be a separate entity for the purpose of enabling the
Development Authority to impose a development tax on the company.
[Bharat Aluminium Co. v. Special Area Development Authority, (1981) 51 Company cases 114
(MP)]
Similarly, where transport services were provided by a company all of whose shares were owned
by the Transport Commission, the court refused to lift the corporate veil and held that the
transport services were provided by the company itself and not by the Government (i.e.,
Transport Commission) . Thus, a Government company is not regarded as the Government itself
or its agent. It can be regarded as an agent of the Government only when it is performing in
substance governmental or sovereign function, and not merely commercial function.