Corporate Personality

1
Corporate Personality

• Prepared by Stacey Woods
• Class 5 LAWS3089
• 26 August 2003

2
Definition of Corporate Personality

• power of a company to acquire and exercise legal
  rights and to assume legal liabilities
• Butterworths Legal Dictionary

3
Readings

• Salomon v A Salomon Co Ltd 1897 AC 22
  leading case that recognised legal capacity of a
  company from the legislation
• Article Gowers Principles of Modern Company
  Lawsometimes corporate entity works like a
  boomerang and hits the man who was trying to use
  it
• Lee v Lees Air Farming 1961 AC 12Company as
  separate legal entity ability for person to
  function in dual capacities

4
Consequential developments of Corporate
Personality

• Limited Liability Doctrine
• Corporate Veil
• Ownership Relations and Corporate
  Structurescorporation as legal thing or
  person

5
Limited Liability

• Cheffins article discusses creditors rights and
  obligations to mitigate their risks when entering
  into agreements with companies
• Mentions there are common law doctrines and
  statutory provisions that may be able to hold
  directors and possibly members accountable
• Listed companies have audits available to public
• Company Directors Disqualification Act 1986,
  authorising courts to disqualify a director who
  doesnt show regard for creditors interests
• Questions whether this is enough or should
  company law rules should be altered to increase
  personal liability of shareholders

6
Corporate Veil

• Hard to lift in Australia, courts do not like to
  remove the limited liability of the corporation
• Usually only in cases where a company has
  committed or tried to commit fraud or to evade
  contractual obligations personally undertaken
• Gilford Motor Co Ltd v Horne (1933) 1 Ch 935,
  CAleading case on lifting the corporate veil

7
Ownership Relations and Corporate Structures

• Goes to the essence of a corporation
• Ownership Relations
• Shareholder owns corporation (as a legal thing)
• Corporation owns corporate assets (as a legal
  person)
• Thus company plays dual role as a thing and
  person in law
• Corporate Structures
• Nominalistic theory contractual association of
  shareholders
• Realistic theory organisational entity with a
  legal personality
• Katsuhito Iwai, What is Corporation? The
  Corporate Personality Controversy and Comparative
  Corporate Governance (2001), Faculty of
  Economics, University of Tokyo

8
Building a Winning Corporate Personality

• Determine how/when your company touches people
  (customer service, marketing, communication, pr,
  media relations)
• Demonstrate values thru personal behaviour
  inside/outside the company
• Align employees with the promise of your brand
• The role of CEO is paramount to conveying
  corporate personality
• Use employees as ambassadors
• Treat the media as a conduit, not an adversary
• Maintain consistency stick to the messages you
  send
• Link philanthropy to the companys position,
  competencies, and customer base.

9
End of Presentation