Company Law - English law Case Study Example | Topics and Well Written Essays - 2500 words

Company Law - English constabulary - Case Study ExampleCommentators have attempted to categorise those decisions under various headings, such as agency, fraud, group enterprise, tort and so forth6. What is clear on a close reading of the cases which have marvellous Salomon is that the appeals will only interfere - by lifting the veil of incorporation - where there is clear evidence of misplay or where they are required to interfere by Statute. There is therefore a presumption that members of a limited attach to are only liable to the extent of any unpaid amount on nominal value of their shares unless wrongdoing can be established.LJM Limited seems to have been incorporated for the touch on intention of providing a vehicle for the directors Jean, Lynette and Lauren to unlawfully deprive W&H Limited, its shareholders and its members of its corporate assets and any retained profits from the outside(a) contract.There is authority to suggest that the courts will lift the veil to pr event evasion of an existing obligation7 and the court will grant an injunction/specific performance in that instance. For a short while it as well seemed to be the case that the court would lift the veil where there was clear evidence of asset stripping. In Creasey v. Breachwood Motors Ltd 19928 proprietors of Breachwood Welwyn Ltd transferred that companys assets to the defendant company. The evidence indicated that the defendant company had been formed for the sole purpose of avoiding the payment of a square wrongful dismissal claim. Breachwood Welwyn Ltd was then struck off the company register following the procedure determined down in Section 652 of the Companies Act 1985 hence depriving the plaintiff of any redress. Robert Southwell QC, sitting as delegate High Court Judge, held that the plaintiff could present his claim for damages directly against the new company, Breachwood Motors Limited, as its sole purpose was to strip Breachwood Welwyns assets and deprive Creasey o f redress. The decision in Creasey was unequivocally overruled in Ord & Another v Belhaven Pubs Ltd 1998 by the Court of Appeal. Hobhouse L.J said Creasey v. Breachwood . represents a wrong adoption of the principle of piercing the corporate veil. Therefore, in my head the case of Creasey v. Breachwood should no longer be treated as authoritative.The Court of Appeal cited its anterior decision in Adams v. Cape Industries plc 19909 where plaintiffs were not able to seek redress from a holding company when its subsidiary (the defendant) went into liquidation. The House of Lords have endorsed this stricter interpretation of Salomon more recently in Williams v. Natural Life health Foods Ltd 199810. In that case a exemption company had already gone into liquidation by the while a misrepresentation was discovered. The plaintiff sought redress directly from the sole director of the former franchise company. Their Lordships held not only that the corporate veil was sacrosanct and shou ld only be lifted in the some