Directing The Mind And Will Of The Company †Myassignmenthelp.Com

Question: Discuss About The Directing The Mind And Will Of The Company? Answer: Introducation Directing mind and will of any corporation is the senior most person who has been given the authority by the corporations board of directors (BoD) to perform certain functions that will benefit the company. He/she has the authority to act or perform certain actions that are in his/her mandate and if he/she performs any act that is outside his/her mandate then he/she is accountable and personally liable. In criminal cases, the organization can be prosecuted if found guilty but this is ineffectual because the organization cannot be imprisoned or punished. The company is often penalized and is freed with minimal monetary fine. Thus to affix this, the Doctrine of Identification was promoted to punish the directing mind and will of the company who run the company and are responsible for committing any crime(Park, 2015). This theory experienced growth in the 20th century which explains that the state of the mind of the managers or senior executives is the mind of the company. The company is equated with human body having human brain and will. In criminal cases, the law punishes the guilty mind and hence in companies the guilty mind of the directors or management must be held responsible. The director or agent who is the directing mind and will of the company and is the main personality of the organization is held responsible for any involvement of illegal or criminal activities by the company. The main aim of this doctrine is to punish those offenders who are the mind and will of the company and must be held responsible for any offence committed by the company(Mirajgaoker, 2011). Piercing the Corporate Veil The phrase piercing the corporate veil is a legal concept which actually refers to the removal or separation of the personality of the corporation from the personality of the shareholders and shields them from any debt or wrong doing of the company. However, this shield is not impenetrable and the court can pierce the veil and prove them liable. Piercing the corporate veil is used when the court holds a corporations share holders responsible for the debts or actions of the corporation. Veil piercing is very common generally in close corporations and is done when a serious crime, misconduct, under capitalization or abuse of the corporate form is done. The main benefit of incorporating a firm is to limit the liabilities of the shareholders. However, in certain circumstances the corporate veil is pierced and the shareholders are held responsible for the acts of the corporation(Cornell Law School, 2017). Generally, the directors and officers of corporate must abide by business law and have ethical responsibility. In certain cases, they act in bad faith and breach the code of conduct and perform acts of negligence, but usually they are not held responsible and have no personal liabilities to third parties. In such instances the third parties have to prove their misconduct, fraud or demeaning actions and then the court will held them personally responsible for such acts. The most common actions in which the corporate veil is pierced are co-mingling of funds, failing to keep records, diverting business assets for self and personal use, and officers or directors not performing their duties and functions(Murray, 2016). References Cornell Law School, 2017. Piercing the Corporate Veil. [Online] Available at: https://www.law.cornell.edu/wex/piercing_the_corporate_veil [Accessed 18 september 2017]. Mirajgaoker, N., 2011. Doctrine of Identification. [Online] Available at: https://www.legalservicesindia.com/article/article/corporate-criminal-liability-doctrine-of-identification-488-1.html [Accessed 18 September 2017]. Murray, J., 2016. Piercing the Corporate Veil - What Business Owners Need to Know. [Online] Available at: https://www.thebalance.com/piercing-the-corporate-veil-operations-398410 [Accessed 18 september 2017]. Park, G., 2015. Directing the mind and will of the company. [Online] Available at: https://prezi.com/fvvr3wp32za3/directing-the-mind-and-will-of-the-company/ [Accessed 18 September 2017].