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CORPORATE VEIL

It is often said that the bedrock of corporate law is the notion of the corporate veil. As

business people you would not only be likely to deal with corporations as separate business organisations but you might also hold roles as directors. Would the courts be likely to lift the corporate veil or seek redress against you in relation to all of the following circumstances?

• You are the sole director of a Company X. Several years after it is formed, Company X collapses. In the early stages of Company X's life, you had loaned it money from your personal funds. After the collapse you seek to become a preferred creditor of Company X. What would your position be?

• The facts are the same as above, except that this time your loan is made within months of Company X's collapse and after it has experienced financial turmoil.

• You have established a subsidiary company but that subsidiary has no books of account and no business charter of its own, it seems very much to follow the lead of the holding company.

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