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Assess the likelihood of Sid and Kenny avoiding personal liability for the debts of the company
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Student I.D. 11207984 Question 3 Assess the likelihood of Sid and Kenny avoiding personal liability for the debts of the company. [20 Marks] Answer This question deals with directors avoiding personal liability for debts of a company, especially within the category of fraud, which is applicable to this scenario. This question also deals with lifting the corporate veil as if the directors are found to be liable the veil will need to be lifted, so as to expose the members whom are found to be liable. When a company is incorporated it is treated as a separate legal entity distinct from its promoters, directors, members, and employees and hence the concept of the corporate veil, separating those parties from the corporate body has arisen. The company as a separate entity was firmly established in the landmark decision in Salomon v. Salomon &Co Ltd1. In this case Salomon, a sole trader, sold his manufacturing business to Salomon...
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