Lifting the veil of incorporation or better still; "Piercing the corporate veil" means that a court disregards the existence of the corporation because the owners failed to keep one or more corporate requirements and formalities. The lifting or piercing of the corporate veil is more or less a judicial act, hence it's most concise meaning has been given by various judges. Staughton LJ, for example, in Atlas Maritime Co SA v Avalon Maritime Ltd (No 1)29 defined the term thus: "To pierce the corporate veil is an expression that I would reserve for treating the rights and liabilities or activities of a company as the rights or liabilities or activities of its shareholders. To lift the corporate veil or look behind it, therefore should mean to have regard to the shareholding in a company for some legal purpose. "30 Young J, in Pioneer Concrete Services Ltd v Yelnah Pty Ltd,31 on his part defined the expression "lifting the corporate veil" thus: "That although whenever each individual company is formed a separate legal personality is created, courts will on occasions, look behind the legal personality to the real controllers.
These companies make a point of following the law to ensure that others cannot take legal action against them. For example, a company may create more waste than necessary, but it will remove of the waste in a legal method rather than dumping it illegally. Accommodating An accommodating stance signifies that a company believes social responsibility is important -- and perhaps as important as making a profit. These companies satisfy all legal requirements and attempt to meet ethical standards. An accommodating company does not
They are also subject to the laws of other countries in which they operate. Businesses organized in other countries must obey the laws of the United States when doing business here. In addition, businesspeople owe a duty to act ethically in the conduct of their affairs, and businesses owe a responsibility not to harm society.” In other words, companies conducting business in this country have an obligation to carry out their business practices in a manner that does no harm to anyone or anything. This includes the
2) Discuss whether Enron’s officers acted within the scope of the authority. Enron’s officers did not act within the scope of their authority. The scope of authority only goes as far as the law will allow. When Enron acted dishonestly and unethically to benefit over its shareholder and members, they were no longer in the scope of their authority. 3) Describe the corporate culture at Enron.
Enron Corporation Business Law Enron Corporation Describe how Enron could have been structured differently to avoid such activities. Enron could have been aware of the agents are doing to avoid all the scandals that were going on in its company. Enron should have never used its stock value as collateral to obtain loans from its partnership. The partners in the corporation should have known that these techniques were unethical as well as illegal. As stated by Gilman, Hamed, Navran & Brown (2010), the ten things a company can do to avoid being the next Enron includes: Examine your ethical climate and put safeguards in place - Corporations are composed of cultures.
However, the traders were fired once it was revealed that Enron's reserves were gambled away which nearly destroyed the company. After these facts were brought to light, Ken Lay denies having any knowledge of wrongdoing. Needless to say, when required to testify before the U.S. Congress on the reasons for Enron’s collapse, Ken Lay, Jeff Skilling and Andrew Fastow, sought refuge under the Fifth Amendment. Andrew Fastow, Jeffrey Skilling, and Kenneth Lay are among the most notable top-level executives implicated in the collapse of Enron’s. Kenneth Lay, the former chairman of Enron was prosecuted on 11 criminal counts of making misleading statements and fraud.
(LO 1 ends) 2. Identify the types of ethical concerns that arise in the business world Common ethical issues fall into four broad categories. First, fairness and honesty mean that businesspeople are expected to refrain from knowingly deceiving, misrepresenting, or intimidating others. Second, businesspeople must not put their personal welfare above that of other people or of the organization. Third, businesspeople should avoid real or perceived conflicts of interest.
Skilling was indicated on 35 counts of wire fraud, securities fraud, conspiracy, making false statements on financial reports and insider trading. Lay was indicted on 11 criminal counts of fraud and making misleading statements. He died in 2006 (Weiss, 2009). b) A corporate culture that supported unethical behavior. Enron listed its core values as: Communication, respect, integrity, excellence (Enron Annual Report, 2000).
There is no specific legal prohibition on working alone, but the general legal duties of employers under theOccupational Health and Safety Act (2004) still apply. "An employer shall provide and maintain so far as is reasonably practicable for employees a working environment that is safe and without risks to health." [Section 21(1)] Establishing safe working conditions for lone workers is no different from organising the safety of other employees. Employers should identify the hazards of the work, assess the risks involved, and implement changes to the workplace and safe working arrangements to ensure the risks are either eliminated or adequately controlled. When it is not possible to devise arrangements for the work to be done safely by one person, alternative arrangements providing help or back-up have to be devised.
The irregular accounting practices, including manipulating stock prices, caused Enron to have to file bankruptcy in December of 2001 (Thomas, 2002). The scandal is the most significant corporate collapse in the United States since the failure of many savings and loan banks during the 1980s (Hanson, 2002). Enron collapsed for many reasons. .Among the many reasons were the lack of attention shown by members of the Enron board of directors to the books financial entities and the lack of truthfulness by management about the health of the company and its business operations (Hanson, 2002). The firm’s senior managers had engaged in fraud for an extended period through a scheme in which partnerships owned by the managers could receive payment for goods and services never provided to Enron.