Corporate Attribution And A Directing Mind †Myassignmenthelp.Com

Question: Discuss About The Corporate Attribution And A Directing Mind? Answer: Introducation A company is deemed as a legal person although it has to act through the natural persons and so, there is a need for the rules to govern the attribution of the companies for the state of mind and the act of the individuals. In simple words, directing mind and will, for a company refers to the identification of the natural person who has the management, as well as, control, with regards to the act in question. Lord Ried, in the criminal case of Tesco Supermarkets Ltd v Nattrass [1972] A.C. 153 HL, associated the directing mind and will test with the requirement of identification of the living person who could be deemed as the companys embodiment. This was the leading case in the matter of this theory, in which the court held that the store manager was not the one who was directing the will and mind of the company (Bailii, 2017). In the civil case of El-Ajou v Dollar Land Holdings Plc [1994] 2 All E.R. 685, the Court of Appeal members favoured a flexible interpretation of this test as the natural persons who had the control, as well as, management regarding the omission or the act in question and this is to be deemed as directing mind and will. So, the directors or the other key members of the board, or any other person for such purposes, who steers the company in a particular direction, towards the particular act, would be identified through the use of this concept (Ferran, 2012). The company form of business structure has been given the status of separate legal entity, whereby they are given a distinguished status from the individuals who run its operations and daily activities. And so, for the actions of such individuals, the company is not liable, and the same is true, the other way round. However, the concept of piercing the corporate veil is a concept, whereby the separate legal entity status of the companies is set aside and the court, in needful cases, pierces the veil of a corporate, which is being used in an unfair manner by the individuals (Wibberley et al. 2017). The conception of piercing of corporate veil was established through the case of Salomon Co Ltd [1897] AC 22, in which Salomon was the shoe manufacturer who used the company as a shield to incur debts for the company. The court stated that from the very date on which a company is incorporated, it becomes legal persona and has distinctive rights and liabilities from its shareholders and members; though, in extraordinary cases, the veil can be pierced. And so in this case, the case pierced the corporate veil of the company and held Salomon liable for the debts which were undertaken (McLaughlin, 2015). Thus, when the corporate veil of the company is pierced, it treats the rights and duties of the company as that of the shareholders. And for the purpose of piercing the corporate veil, the quoted case is cited quite often. References Bailii. (2017) Tesco Supermarkets Ltd v Nattrass [1971] UKHL 1 (31 March 1971). [Online] Bailii. Available from: https://www.bailii.org/uk/cases/UKHL/1971/1.html [Accessed on: 19/09/17] Ferran, E. (2012) Corporate Attribution and the Directing Mind and Will. [Online] University of Cambridge. Available from: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2025884 [Accessed on: 19/09/17] McLaughlin, S. (2015) Unlocking business Law. 3rd ed. Oxon: Routledge. Wibberley, J., Chambers, G., and Gioia, M.D. (2017) Lifting, Piercing And Sidestepping The Corporate Veil. [Online] Guildhall Chambers. Available from: https://www.guildhallchambers.co.uk/uploadedFiles/PiercingtheCorporate%20Veil.JW,MDG.pdf [Accessed on: 19/09/17]