Tag: doctrine

The Veil Doctrine In Firm Legislation

At the identical time, courts have acknowledged that the company veil of a company could also be pierced to disclaim shareholders the protection that the precept of separate legal entity usually supplies. It is famous that there are exceptions beneath the common regulation and statutory to raise the veil in relation to torts committed by a gaggle company. The primary exceptions embrace cases the place an company relates between a subsidiary and a mother or father company. In the context that a subsidiary acts as an agent, the mere train of control over the subsidiary by a parent firm will function an insufficient ground. Based upon principle of economic effectivity, four reasons justify the doctrine of restricted legal responsibility. Firstly, the restricted legal responsibility decreases the necessity for shareholders to watch the managers of companies they invested in, so as to facilitate the separation of ownership and management in massive … Read More