BS LAW
NATIONAL ECONOMIC UNIVERSITY
BUSINESS SCHOOL
Module title: Business Law
Title of assessment: Michael Ltd
Course: E-MBA 13B
Submission date: Wednesday, 8th April 2015
Time: no later than 18:00PM
Submission location:
Member in group: 1. Nguyễn Thanh Mai EMBA13102 2. Nguyễn Thị Ngọc EMBA13112 3. Nguyễn Văn Huyên EMBA13077
Word count: 1,313 words.
TABLE OF CONTENTS
CONTENTS 3
I. In case of material delivered to Refressment Ltd and orders received by Refressment Ltd were not passed on to Moonflowers Ltd 3
II. There were the passed from Refressment Ltd on to Moonflowers. 5
CONCLUSION 7
REFERENCES 8
CONTENTS
In this case, before giving advice to Michael Ltd, it’s necessary to clear the relationship between Strongman Plc., Refressment Ltd and Moonflowers Ltd. With each circumstance case, there is one advice to Michael Ltd.
First, Strongman Plc. is the parent company in a group of companies operating in the production and distribution of water spot equipment. Moonflowers Ltd is a wholly – owned subsidiary of Strongman Plc., and was only recent incorporated. Therefore, relationship between Strongman Plc. and Moonflowers Ltd is parent – subsidiary company. According to Common Law, “the parent company has control over the subsidiary” (slide company under common law – lecture 2) but it’s “separate entities and independent of one another”. However, under common law, a court may "pierce the corporate veil" of the parent if it finds an appearance of impropriety through questionable share transfers or other fraudulent means of avoiding the subsidiary 's liabilities. Courts might also subordinate the parent 's debts to outside creditors if the parent has engaged in unfair conduct, such as influencing new creditors to extend credit to the subsidiary while knowing the subsidiary 's poor financial condition (Shaa Hudson, Demand Media, smallbusiness.chron.com).
Before explaining Strongman and Moonflowers having responsible to pay the debts of Refressment or not,
BUSINESS SCHOOL
Module title: Business Law
Title of assessment: Michael Ltd
Course: E-MBA 13B
Submission date: Wednesday, 8th April 2015
Time: no later than 18:00PM
Submission location:
Member in group: 1. Nguyễn Thanh Mai EMBA13102 2. Nguyễn Thị Ngọc EMBA13112 3. Nguyễn Văn Huyên EMBA13077
Word count: 1,313 words.
TABLE OF CONTENTS
CONTENTS 3
I. In case of material delivered to Refressment Ltd and orders received by Refressment Ltd were not passed on to Moonflowers Ltd 3
II. There were the passed from Refressment Ltd on to Moonflowers. 5
CONCLUSION 7
REFERENCES 8
CONTENTS
In this case, before giving advice to Michael Ltd, it’s necessary to clear the relationship between Strongman Plc., Refressment Ltd and Moonflowers Ltd. With each circumstance case, there is one advice to Michael Ltd.
First, Strongman Plc. is the parent company in a group of companies operating in the production and distribution of water spot equipment. Moonflowers Ltd is a wholly – owned subsidiary of Strongman Plc., and was only recent incorporated. Therefore, relationship between Strongman Plc. and Moonflowers Ltd is parent – subsidiary company. According to Common Law, “the parent company has control over the subsidiary” (slide company under common law – lecture 2) but it’s “separate entities and independent of one another”. However, under common law, a court may "pierce the corporate veil" of the parent if it finds an appearance of impropriety through questionable share transfers or other fraudulent means of avoiding the subsidiary 's liabilities. Courts might also subordinate the parent 's debts to outside creditors if the parent has engaged in unfair conduct, such as influencing new creditors to extend credit to the subsidiary while knowing the subsidiary 's poor financial condition (Shaa Hudson, Demand Media, smallbusiness.chron.com).
Before explaining Strongman and Moonflowers having responsible to pay the debts of Refressment or not,
References: 5. Distinction Between Subsidiary And Wholly Owned Subsidiary. Lawtecher.com. http://www.lawteacher.net/free-law-essays/business-law/distinction-between-subsidiary-and-wholly-owned-subsidiary-business-law-essay.php [Accessed on April 07, 2015 6 9. Douglas Kerr. Hiding Behind Subsidiaries: Holding Parents Liable. GULS. http://www.gulawreview.org/entries/commercial/hiding-behind-subsidiaries-holding-parents-liable. January 10, 2014. 10. Marlies Braun. UK: When Is A Parent Company Liable For The Actions Of Its Subsidiary?. Mondaq. http://www.mondaq.com/x/149348/Corporate+Company+Law/When+Is+A+Parent+Company+Liable+For+The+Actions+Of+Its+Subsidiary October 17, 2011. 11. Shaa Hudson, Demand Media. The Relationship Between a Company & Its Subsidiary. Chron. http://smallbusiness.chron.com/relationship-between-company-its-subsidiary-14696.html [Accessed on April 08, 2015] 12 13. Companies Act 2006. Legislation.gov.uk, [Accessed on April 07, 2015]