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Posts Tagged ‘Corporate’

generally people will incorporate their business so as to limit their personal liability. As corporations are considered separate legal entities from the shareholders, incorporation ensures in most cases that potential losses (which may be attributable to individuals) become limited to what has been previously invested. These parties are protected by what is known as the “corporate veil”. The million dollar question therefore is… “How well are they actually protected?”

Unfortunately, individuals are not completely protected. Recent case law seems to suggest that there are situations where the corporate veil is insufficient to protect the individual shareholders and in certain circumstances the directors and officers as well. The personal assets of these individuals can become fair game in the wake of a dispute.

This is not to say that it is a simple matter for a court to pierce the corporate veil – the threshold continues to be a high one. However, it is important for those individuals relying on corporations to protect them from increased personal liability to be aware of some of the dangers and risks of their position. These individuals should also be mindful that this protection is anything but failsafe. Here are some scenarios where courts have ruled that individuals would not enjoy the protection usually provided by the corporation’s separate legal status:

* When shareholders do not treat corporations as separate entities from themselves and merely use it as an “alter-ego”, “puppet”, “conduit” or an agent of themselves (whether in an effort to deceive another party as to who they are actually dealing with, or for other improper purposes). In this scenario, the courts tend to view the corporation as a sham or a “cloak” for the shareholder, and recognize that the debts and liabilities of the corporation are actually those of the shareholder. In such cases, corporate formalities such as annual filings, meetings, and separate accounting records are often disregarded.

* When the shareholders have used the corporation in such a way so as to commit any fraudulent activities, the courts will not allow the shareholders to hide behind the corporation’s separate legal status. A corporation engaging in conduct “akin to fraud” will warrant a piercing of the corporate veil. This will occur when a corporation is being controlled and used by its shareholders (or directors and officers) as a shield for fraudulent or improper conduct, whether or not the corporation was originally legitimate. The conduct need not actually be fraudulent, it would be sufficient for the conduct to be merely “akin” to fraud.

* Where piercing the corporate veil will serve to link affiliated companies with a parent, subsidiary or otherwise affiliated corporation. This will occur in circumstances where one company is acting as nothing more than a “puppet” or agent of another (not unlike the situation noted above, however, in this circumstance, the “puppet master” is another corporation rather than an individual). Such an inquiry would turn on issues such as where the profits were going, which company was in control, who was truly making the decisions, etc. The corporation’s separate legal status will not be lifted to expose the individuals to personal liability in every (or even many) situations of a parent and subsidiary corporation, rather, depending on the circumstances, the separate legal entity of an affiliated corporation will not bar the corporate veil from being lifted when a court deems it to be necessary.

* Where it is in the interest of justice to pierce the corporate veil due to policy reasons. The various policy reasons a court may use as justification are potentially limitless and may relate to such areas as matrimonial disputes, tax or tortious acts committed by an employee of the corporation, just to name a few. One relevant example in Ontario was a matrimonial case (Arsenault v. Arsenault ((1998) OJ no. 1423)) where a husband was the sole shareholder of a corporation. The court was suspicious of how the gentleman was controlling the corporation after the separation from his wife and before the resolution of their financial issues. It was believed that he was attempting to protect certain assets from being applied to support payments that he would be forced to pay to his wife. To avoid financial injustice for the wife, the court found it to be appropriate to look beyond the incorporated status of the company and recognize that the assets in question truly belonged to the husband. The court concluded that “…in the end, although a business person is entitled to create corporate structures and relationships for valid business, tax and other reasons, the law must be vigilant to ensure that permissible corporate arrangements do not work (towards) an injustice…In appropriate cases, piercing the corporate veil…may be an essential mechanism…”

Beyond actually piercing the corporate veil, there are additional circumstances where directors and shareholders can be held personally liable for various corporate acts (or omissions) such as unpaid wages to employees and issuing shares without receiving payment. A thorough discussion of the additional considerations falls beyond the scope of this article, but suffice it to say that there are too many potential pitfalls in the business world to proceed without seeking the appropriate guidance and advice.

Whether or not a corporate veil would be pierced for a specific purpose or policy reason will depend heavily on the facts and circumstances of the particular case. As a prudent shareholder/owner, one must ensure that the dealings of the corporation are legitimate and that the proper steps are being taken to maintain the corporation’s good standing. If there is any doubt or concern, it is vital to consult with a lawyer when evaluating whether you are at risk of suffering any personal liability, as well as how to carry on with your business. The illusion that too many people are misled to believe is that you are entirely protected as an individual when you incorporate your business. Do not be fooled – protect yourself as best as you can.

Jordan S. Halpern is an associate lawyer with BrazeauSeller.LLP. He practices in the areas of corporate/commercial transactions as well as commercial and residential real estate.

it´s no secret. One of the best ways to expand your business is moving towards new markets. And how do you accomplish this? How do you gain market share? One of the best ways, of course, is spend more money in advertising. But, not everyone has the advertising budget that big companies have. So, what can you do if you don´t have the funds for major-league advertising? Consider corporate website translation as the solution for you.

Recent marketing reports revealed very interesting statistics. Over 100 million people access the Internet in a language other than English. Moreover, over 50% of these users speak a native language other than English. So, if you want to reach new customers in new markets, it makes sense to approach them in their native language.

It is a good idea that you translate your entire site. Nevertheless, consider the option of partially translating your web page, such as product or service details, graphics, client portfolio, and other important facts. Think of how delighted your potential customers will be to access this information in their own language. You´ll definitely gain the competitive edge.

Experts acknowledge the value of corporate website translation. You may think most users are able to understand the information they read in English on the Web. But they may miss important details, misunderstand key issues, just because, since English is not their native tongue, misinterpret the subtle differences. This is even more important when dealing with industry-specific terms.
Your corporate website translation project will be assigned to a translator, or team of translators, who have experience and are qualified to work in your specific area of expertise. They will be able to clearly convey your marketing message to your foreign clients, ensuring a high quality translation. Editors will then carefully proofread and review the translation to detect any errors or inconsistencies. They will make sure they deliver a website that is suitably adapted to the new customers you wish to reach.

You can´t afford to ignore these important findings. Your business growth and expansion might depend on it. What you fail to do, might give your competitors the competitive edge, and they will take the lead while you lag behind. Corporate website translation is the strategy that goes hand in hand with global growth strategy. It will definitely help you capture a bigger piece of the market.

Corporate social responsibility is the buzz word in big business. In this age of environmental awareness and people empowerment, corporations are expected to behave ethically, uphold environmental sustainability, help combat poverty and support social justice. The public has learned to demand this in exchange for corporate existence.

Although it is also true that many companies get away by paying mere lip service to corporate social responsibility, a lot of other companies have found it profitable to actually do the right thing. As more and more people are becoming socially responsible themselves, companies that “go green” or use sustainable technologies in producing environmentally safe products are gaining increasing numbers of loyal customers. From hybrid cars to green home cleaning solutions to natural makeup, products that save the earth are becoming the choice of many consumers.

On the other hand, companies that have been caught red-handed – such as those proven to cause environmental contamination or those proven to outsource their manufacturing to sweatshops in developing countries – have faced censure and profit-shearing boycotts.

Aside from the profitability of corporate social responsibility, though, companies would do well to recognize that it is actually be in their best interests to ensure the welfare of the environment and the people of this earth. The planet is their business site and the people are their market. For now, at least, there is no other known choice. How can they not want to protect their location and their market?

Corporate social responsibility is not only for big business, either. Even small and medium scale companies are called to uphold its principles.

Web Dot Com and CSR

Web Dot Com is a company that offers a wide range of services in the field of website development and business process outsourcing in the Philippines with international clients.

Its comprehensive website development solutions include portal development and other custom programming, web design, graphics and multimedia design, content management systems, web based database programming, e-commerce solutions with online store applications for online shopping and online payment, search engine optimization, website maintenance and support, search engine marketing, and social media marketing.

It business process outsourcing in the Philippines includes animation and graphic design, software development and maintenance, back office processes, and contact center solutions. Contact center services include appointment setting, customer profiling and acquisition, business to business telesales, credit card processing, lead management, customer relations management, customer support and technical support.

So what does corporate social responsibility have to do with website development and business process outsourcing in the Philippines? Web Dot Com is of the opinion that they are related and that, in fact, it can do quite a lot in the realm of corporate social responsibility.

After all, Web Dot Com is based in the Philippines, a nation with 23 million people or 27 percent of the population living below the Asia-Pacific poverty line, according to the Asian Development Bank in 2008. This same country was tagged by the World Bank in 2008 as having the worst corruption in East Asia. As a corporate citizen of the Philippines, Web Dot Com cannot be isolated from these conditions.

As an expert in web-based processes, Web Dot Com is in a position to reach a wide number of Filipinos both in the country and around the world. It is fully equipped to support or even launch any advocacy online for the benefit of the Filipino people.

That is exactly what the company intends to do. Soon, Web Dot Com will be launching a powerful campaign to inspire awareness and involvement among Filipinos to positively make an impact on their own country’s fate. Watch out for this campaign.