company law
...rotect the other one trading with the company/personal,(Japanese High Court ,1969),The theory is specially suit for one-person private company like Salomon Ltd, and take advantage of company to avoid personal liability. In Salomon v. A. Salomon & Co Ltd, Mr. Salomon got the priority right to get the tender of debts, although his wife and five sons were shareholders, but got nothing, because once the company had been registered, Mr. Salomon became a separated personality without relation of the company, so he had priority right than other creditors without hypothecate. There is no doubt that Mr. Salomon’s purpose to set up company was in order to take advantage of limitation liability, the shareholders except Mr. Salomon were nominal, but it was legally right, obviously it is a gap of the law. Although there was no evidence of fraud from that in Salomon v. A. Salomon & Co Ltd, it’s because the fellows known what was going on, they could take advantage of the held from the court to prevent their personal benefit, they got the payment, what about the personally liable for its debt if it appears that the alleged company is a mere façade for the fraudulent activities of the owner? It is known as “lifting the veil of incorporation” In Hedley Byrne v Heller(1963).the veil may be lifted to make a direct personally liable for negligent advice given on behalf of the company provided that a “special relationship”, the “lifting the veil of company” is to make sure two things: the personality is the same as its members, and the company is a simplicity business entity.[FN2] Example as Unit Construction Co. Ltd. V. Bullcock (1960). It is a shell game, the three registered companies in Kenya were controlled by one company in Britain, in order to avoid the taxes. So, the “lifting veil of company” is to prevent cheating and avoid the obligation by a form of company, as avoiding public policy (ark v Flemming, ), infracting company property(Audersen v Chatham,), misadvicing or cheating creditors(Yacker v Weiner,),escaping from the fraudulence behavior,( Walkovszky v Carlton) ,”Under S213of the Insolvency Act 1986,if during the liquidation of a company it becomes evident that the directors were trading fraudulently, they may be required personally to contribute to the payment of the company’s creditors”[FN3],It refers to the remedy. When the law has been improved, we can not negate company personality, though it is easy to transfer the business risk, except to limitation liability principle, previous headmaster of Harvard University said: ”L imitation liability is the most great invention in modern time …….” [FN3] The key is to definitude the liability. And so it cannot avoid be in conflict with human right. Personality is not a nature man, it has separated entity from right and obligation, it can be harmful to human right or good to it, like the function of company to avoid business risk, it is agility to transfer it, in Salomon v. A Salomon & Co. Ltd ,it was held to be benefit for salomon, so it seems unfair if not in the separated personality. As example Briggs v James Hardie.Ltd , an important conclusion to them is that the infract behaviors are not illegally but just from the law, it is a kind of vanish attitude, so the law indulge the behaviors. Of course if the company take measures to protect the employees, it act the role as human right protector and promoter.[FN4] In traditional theory of company personality, personality is comparative to nature person, The separated personality of the company takes shareholder and company in the property, managing distinct from them to be precondition, and form a veil in order to make creditors can not pass through the personality to run any liability to the shareholders’, so the shareholders can go without saying to get limitation liability and avoid running from the creditors, but in one-person company, managing director and shareholder focus on one person, many responsibilities or obligations can not be carried out, such...