In today’s #FridayRead, we will briefly discuss the doctrine of Piercing or Lifting the Corporate Veil.
A company is a separate legal entity formed to regulate the operations of a business and can sue and be sued.
The case of Salomon v. Salomon establishes that a company is a legal person separate from its directors, shareholders, employees and agents which can essentially sue and be sued separately from its shareholders.
Piercing or lifting the corporate veil is a method used by the courts to disregard the corporate personality and separate the shareholders of the company and from the company in a situation where there have been fraudulent and improper conducts by the persons operating the company.
One of the cases that established this doctrine is the case of Walkovszky v. Carlton. The court held that an individual can be held liable for the acts of a corporation through the doctrine of respondeat superior.

The literal meaning of this phrase means it is not my deed is a defence invoked in contract law to escape an effect to a signed document.
In the instance of an agreement involving two or more parties, a party can invoke the non est factum as a defense against the consequences of document signed by virtue of fraud or misrepresentation. In addition, although the party admits to signing the document he can plead non est factum on the grounds that he was defrauded by the other contracting party and not ought to bear the effects of the signed document.

In Today’s Friday Read, let’s look at the meaning of “Directors” from the Companies Act, 2019 Act 992 (“the Act”) perspective.
For the purposes of this Act “directors” means those persons, by whatever name called, who are appointed to direct and administer the business of the company
In accordance with section 170 of the Act, a Director is:

(2) A person, not being a duly appointed director of a company,
(a)who holds out as a director or knowingly allows to be held out as a director of that company, or
(b)on whose directions or instructions the duly appointed directors are accustomed to act, is subject to the same duties and liabilities as if that person were a duly appointed director of the company.
(3) Subsection (2) shall not derogate from the duties or liabilities of the duly appointed directors, including the duty not to act on the directions or instructions of any other person.
(4) Where a person, who is not a duly appointed director of a company, holds out as a director or knowingly allows to be held out as a director of the company, or if the company holds out that person, or knowingly allows that person to hold out as a director of the company, that person or the company, is liable to pay to the Registrar, an administrative penalty of two hundred and fifty penalty units.
(5) For the purposes of subsections (2), (3) and (4), a person who is described as director of a company, whether the description is qualified by the word “local”, “special”, “executive”’ or in any other way, shall be deemed to be held out as a director of that company.

Let’s note that a Company is required to have a director. However, it is important to note that there are limitations on the powers of the director.

Let’s start by defining Legal Due Diligence.
Legal Due Diligence is simply the process by which legal documents and information relating to a target company are collected and assessed. Furthermore, Legal Due Diligence can be defined as a study of a target company in terms of many areas such legal, tax, financial, environmental, human resources in the process of mergers & acquisitions and corporate finance transactions, conducted to clearly reveal its true condition.
The function of the Legal Due Diligence is to allow investor or purchaser to have a clear picture of the status of the target company in terms of the area above stated, and also identifying risk factors and make accurate decisions for going through with the planned transaction or its terms and conditions.
It is important to note that during a Legal Due Diligence, the purchaser or investor usually reviews the investee’s commercial books and records, operational information, financial documents, contracts movable and immovable property records, intellectual property documentation, governmental permits and approvals, human resources documents and application, legal disputes proceedings such as lawsuits and enforcement procedures concerning the target company.

In Today’s Friday Read, we will be looking at “Divorce” in the Matrimonial Causes Act, 1971 (“the Act”).
According to Merriam-Webster dictionary, Divorce is the legal dissolution of one’s marriage. In accordance with the Act, the sole ground for granting a petition for divorce shall be that the marriage has broken down beyond reconciliation.
To show that the marriage has broken down beyond reconciliation the petitioner shall satisfy the court of one or more of the following facts according to section 2(1) of the Act:

(a) that the respondent has committed adultery and that by reason of such adultery the petitioner finds it intolerable to live with the respondent; or
(b) that the respondent has behaved in such a way that the petitioner cannot reasonably be expected to live with the respondent; or
(c) that the respondent has deserted the petitioner for a continuous period of at least two years immediately preceding the presentation of the petition; or
(d) that the parties to the marriage have not lived as man and wife for a continuous period of at least two years immediately preceding the presentation of the petition and the respondent consents to the grant of a decree of divorce; provided that such consent shall not be unreasonably withheld, and where the Court is satisfied that it has been so withheld, the Court may grant a petition for divorce under this paragraph notwithstanding the refusal; or
(e) that the parties to the marriage have not lived as man and wife for a continuous period of at least five years immediately preceding the presentation of the petition; or
(f) that the parties to the marriage have, after diligent effort, been unable to reconcile their differences.

(2) On a petition for divorce, it shall be the duty of the court to inquire, so far as is reasonable, into the facts alleged by the petitioner and the respondent.

(3) Notwithstanding that the court finds the existence of one or more of the facts specified in subsection (1), the court shall not grant a petition for divorce unless it is satisfied, on all the evidence, that the marriage has broken down beyond reconciliation.

In conclusion, it is safe to say that the above mentioned must be proved to establish or satisfy a court that a marriage has broken down beyond reconciliation based on which the court will grant a petition for divorce.