Corporate (with a) Personality

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Corporate Personality:

      Advantages of Incorporation:

·         Company is treated as a Separate Legal entity

·         There exists a corporate veil which separates members from its company

·         Members of the company have limited liability

·         Shares can be transferred by members.

  

Disadvantages:

·         Corporate Veil can be lifted or pierced whenever there is public interest      involved depending on the circumstances like for determination of character,  for tax evasion, in case of fraud etc.

·         There are lot of formalities involved it’s more expensive

·         Though company is a separate legal entity and an artificial person in the eyes of the law, it doesn’t enjoy the citizenship of a country.

Corporate Veil:

 A fictional veil created between the members of the company and the company itself is a corporate veil. This provides the company a separate legal existence from its members.

   But this veil can be lifted in certain cases where the corporation or its members are indulged in fraudulent activities or trying to get some undue benefits. Thus in such cases the directors of the company may be held personally liable.

     Salomon v Salomon & Co Ltd.(1897)

       Salomon, a shoe manufacturer incorporated a company Salomon & Co Ltd. and his wife, his daughter and four sons became the only members of company. So the company was covered by Limited Liability clause, which allowed the company to be a distinct legal entity from its owners. The company went into liquidation within one year. Salamon was a debenture holder with the largest share and there were unsecured creditors as well. Assets were not even sufficient for debenture holder and thus nothing would have been left for unsecured creditors.

         Now liquidator on behalf of those unsecured creditors contended that this company was mere sham and it was like an agent of Mr. Salamon.

        The British Court of Appeal stated that Salamon had abused the privileges of Incorporation and limited liability and other subscribers to shares were mere puppets and he continued doing business as a sole proprietor. These legal proceedings did not impress the business community.

        House of Lords however reversed the decision. Lord Hershell said” I ‘am at a loss to understand what is meant by saying that A. Salamon & Co Ltd. is but an alias for A. Salamon. It is not another for same person; the company is a distinct legal persona.”            

        In my opinion, this judgement was absolutely based on the principle of “Separate legal entity” and “limited liability” which generally encourage people to form in-corporations inspite of being more expensive and more formalities involved. Also there was an opportunity for the unsecured creditors to have a look at company’s documents like Memorandum of Association where members of the company were clearly stated and had an option of not signing the contract with them. Since there was no fraudulent or tax evasion activity done, court did not have to pierce through the corporate veil.

Principles involved in this case:

Separate legal entity – Company has a separate existence from its members thus Mr. Salamon is not personally liable but just company is.

Limited Liability – Company as a separate entity has unlimited liability but the members of the company have limited liability ,thus providing them a great sense of security and promoting limited liability companies.

Prest (Appellant) v Petrodel Resources Limited & Others (Respondents) [2013]

  This case is related to financial remedies following a divorce between Michael Prest and Yasmin Prest. It’s about seven residential properties belonging to Petrodel Group which was owned and controlled by Michael Prest, the husband. The question was whether these properties could be transferred to Yasmin Prest as they legally belonged to his companies.

            The lower court gave the judgement in favor of Mrs. Prest. The Court of Appeal allowed the appeal by Mr Prest's companies and stated that it made no difference that the companies had a single owner which had total control over them and their assets. Rimer L J stated that "there may be factual circumstances in which it will be legitimate for the Court to pierce the corporate veil" but he said this was not such a case.

             But the Supreme Court unanimously allows the appeal by Yasmin Prest and declares that the seven disputed properties vested in the companies are held on trust for the husband on the ground that the properties were held by the husband’s companies on a resulting trust for the husband, and were accordingly “property to which the husband is entitled, either in possession or reversion”. But it said that Corporate Veil has to be lifted in rare instances like for tax evasion or where there is an undue advantage obtained by the company or its owner based on the principle of separate legal entity. The only basis on which the companies were ordered to convey properties to the wife was that they belonged beneficially to the husband, they were held by companies on trust for the husband. Properties were transferred not merely because the sole owner and controller of the company was husband, but because funds for that property were provided by her husband.

             This was also a landmark decision which depicted the importance of corporate veil, which was not supposed to be lifted in any case apart from rare cases. Though this case went in favor of Mrs. Prest, it sent a very strong message to other courts that corporate veils can not be lifted in any random case of financial relief.

Love vs Love (Contd.)

Long Distance Relationship(LDR) is a hard nut to crack.I know I haven't done Ph.D in "Love psychology" but have gone through that practically.Life is not so rosy for most of the couples in LDR. If its an LDR from the beginning itself, its less problematic but if it becomes LDR from same city relationship, it's gonna be tipsy-topsy-curvy road for them. When people are in relationship, they tend to develop certain kind of expectations, which people say should not exist in true love, but that's not true. A relationship can not even exist without expectations. Expectations can be big or small but they do exist. These small expectations cause huge turn around in relationships. 
       
       When you are residing in the same city or town or whatever, you tend to meet each other personally. While talking to each other, unintentionally you are also observing their emotions, expressions, you have a brief idea of what other person is going through at that point of time - happiness, sadness, irritation, good mood, bad mood, terrible, etc. So when ever there is an argument or a clash, these emotions play a vital role in reviving the relation and taking it back to normalcy.

       When you are not staying in the same city, all you can do is talk over call or probably a video chat but meeting frequently becomes practically difficult economically and physically unless you are Ambanis or Tatas or of that level.
This is where the problem starts. When a girl calls you, she expects you to listen to her day to day routines, be with her virtually in everything she says, understand her troubles of the day, her joys of the day, listen about her friends, her enemies, her friend's friends. She expects you to reciprocate to her, talk to her, use those three words which she dies for, talk about your day's adventures or boredom, BUT TALK. For most of the guys, after a hectic day, having a beer, watching sports, hanging out etc. are the ways to vent out frustration and feel relaxed. Of course they too love talking to their girls but for them, even short talks with less frequency are worthy and makes their love grow stronger. But what they don't understand is that the options which are open for guys, might not be open for girls. She might have not gone out with her friends since the relationship started and going now would be impossible. She might not be allowed to have a beer with her friend. She might not be allowed to go late night with her friends and feel good just like you do. Thus talking to you is the only and best option available to her. I know in the current scenario, time is some thing too much to be asked for but make sure you give that time to her else you will only have "time" in future and not her.
        
            If any issue arises between them, both of them really can not understand what other person has gone through during that period or just before that, they might have had an argument at office , home, friends any where.

           Having said that above, for girls also its equally important to understand that a guy might not be able to give his time to you, but he still loves you. He is also struggling without you and waiting desperately for your next meet. So next time, if you face any such situation, relax and understand that other person is in need of love, care, support, motivation thats it.

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How I met my Mother-in -Law's daughter...

Meri phasne ki nayi chahat thi........

Love @ first sight..was not which happened with us..Thanks to "Malhaar Book depot" ..zindagi badal ke rakh di meri kambhakht :( :D jokes apart, that was the first time I talked to her wen V met @ that shop and then realized that she was the one for me..YES She was da one for me who ....COULD COMPLETE MY EDP(Engineering drawings) drawings :)as she turned out to be my class mate..
Gradually, by the end of first year engineering, we became "Just Friends" and by the end of Second year our "Just Friends" status changed to "Good Friends" which could have been seen easily in our Orkut testimonials for each other.
Then one day some "Shaitan" resided in me and I called her a "CARTOON" and she suddenly realized that she is a gal and had the power of attorney to stop talking to me :( Even I was overpowered with male ego and we were not in talking terms till our 3rd year 1st semester results were out and we checked them out together and there we go..."Good Friends" changed to "Best Friends" by the end of 3rd year.This was the time we realized each other's importance in our lives,her problems became my problems,her difficulties became my difficulties and my probs became her probs and my crushes...NAA.. they didn't become her crushes :) infact she started helping me out to interact more with my crushes. During that time one, very new and interesting concept was introduced by one of my most kamina friends who did not even attend my wedding :X(grrrr) and concept was called "Twinkle theory" as per which when a guy looks at the girl or girl looks at the guy, he or she  can observe "Twinkle" in their eyes and my wife and myself were the first set of test data for that concept. Then the moment came before 4th year second sem exams,I went to shirdi with my family and I realized that I was missing this person who was helping me interact with my crushes rather than missing those crushes themselves..and thanks to SAI BABA we decided to be wid each other 4eva... and love was in the air..and trees around us were humming songs like "Yehi sach hain, shayad..MAINE PYAR KIYA"

After so many years, I am still able to listen to same trees humming the song "Om Mangalam mangalam...om mangalam..." and thats it - "Rab Ne Bana Di jodi" ;)

PS : Intermediary struggle for marriage  would be coming up in next posts

Love vs Love

              Falling in love can be one of the most beautiful feelings one can experience, what can happen next is a different story though :) . People either fall in love naturally or forcefully. By forcefully I mean when they get desperate for a bf or a gf and tend to think that they are falling in love.That's actually a dangerous situation because if it works out and it was "natural love" from one side and "forceful falling in love" from other, it can cause some serious damage by the time that person realizes that it was not true love.

              There are few signs which can make you understand that you are in love, true love :

1. When your heart skips a beat by just listening to her/his name +

2. When you start finding the other person beautiful (not HOT or SEXY) +

3. When you aren't comparing him/her with any one else in the world +

4. When you aren't thinking of any benefits for being with your love +

5. When are you finding excuses to meet them/ talk to them/ get a glimpse of your sweetheart +

6. When you have decided to marry that person without any second thoughts +

7. When you start taking their names regularly at home to see your family's reaction +

8. When you can't bear a single word against him/her +

9. When you have to spend sleepless nights ( chatting/talking or missing) +

10. When you re-read her/his chat history especially when messages have that essence of love. +

MANY MORE....

       Love is all about understanding each other, caring for each other, talking "sweet nothings" and most importantly respecting each other and giving them some personal space. Most of the couples break up as they take each other for granted and demand 24hrs of each other's time. I'am sure if people start understanding this important part of "love story", it will always be a happy ending for them, assuming other factors favorable (parent's nod for wedding).

More to come in further blogs.....to be contd....

RTE - Boon or Bane?

 The RTE Act, 2009 has been passed with the intent of benefitting economically weaker Sections (EWS) and enabling their children to be at par with the “privileged” society kids. Their intent is extremely positive as it would not only provide quality education to under privileged children, but might also eradicate discrimination and try to bring them to a common platform.

      But the foremost problem with this is its interference with another constitutional right of free trade or business as per article 19(1)(g). With 25% of reservation of seats for EWS, private schools would have to incur the additional cost for EWS students as Government will compensate as per the Govt. fee structure only. This means school management can become apathetic towards those kids, though it’s just an assumption; it can’t be ignored. Also due to substantial increase in standard of education, lot of middle class and upper middle class people are forced to send their children to tuitions or use other resources to keep up the pace with other classmates; for EWS students, it cannot be considered as an option at all. If not tuitions, those parents are themselves helping their kids in their education but for EWS students, even this option doesn’t seem to be feasible. Now, if they are not able to compete with other kids, it can further de-motivate them which in turn can increase the drop out ratio of these kids.

       I think it’s better to put these efforts in the right direction. Either they can pay the compensation as per school standards which can solve few of the above problems or invest in Govt. schools, giving quality education to these kids but with a proper check on schools. Otherwise in current scenario, the interests of these private schools have been totally overlooked.  

Compulsory Voting

Reason for low voter-turnout from urban areas is quite obvious – “DISSATISFACTION”. Educated people think that it’s of no use, putting their efforts, for people who might make promises but not deliver them. There have been so many cases of corruption coming up and thanks to media for showing this facet of Govt or any bureaucrat, urban people have lost faith in democracy. On the other side, rural people are relatively less educated than the urban. But the strong voter turnout is might be due to cash or any tangible incentives given to them and their blind belief in politician’s promises.

     Compulsory voting, like in Australia, can be a good option in a developing country like India because it will increase the voter count to a great extent. When people know that lot of people are going to vote, they might understand the value of their vote which was earlier thought to be of no worth as everyone felt his/her vote would always turn out to be in a “minority” voters and his/her preferred party would lose. Another good aspect of this would be that it would make people do lot of ground work and think broadly before casting their vote.

      I think it can also reduce vote rigging to a certain extent. When people turn out in large no. to polling booths, it becomes difficult to manipulate with them, otherwise small crowd of people can always be threatened or intimidated, which can impact the results. Vote buying can also be reduced because it would be difficult to buy votes from all interest groups.

     Though it seems to be going against democracy, but at times, State has to intervene for the welfare of the people and this intervention is an example of “Welfarism”.

Paid News

Paid news has become a very popular means of conveying manipulated truth (at times truth), to the public, making it harder for them to understand its authenticity.

        Concentration of media ownership across different segments like TV, Printing media, Internet etc. has triggered more paid news. It also becomes a very strong and easy source of financial help for small scale media houses, competing against bigger players in the market. But the problem which it can create is that people might get very wrong perception of someone mistakenly or might get an ultra positive notion about someone, and any such false article, if circulated among citizens, especially during elections, can turn around results dramatically. It becomes even more difficult to identify the correctness of the news when there is same news everywhere and user eventually tends to start believing it as a fact.

       There has to be strong regulations on this. PCI should pitch in, whenever they find a case of false information supplied by media houses and impose heavy penalties on them. In case of repetition of such case by same authority, it should suspend its activity temporarily, sending a strong message to other media players. Individual reader or viewer can go to court for any such wrong doings, but it’s generally ignored unless his interest has been affected. Many a times the common man gets hesitant, seeing the enormous power of the media company.

       There has to be a check on concentration of ownership across different segments which otherwise creates monopoly, which is not so good for democracy. Although it questions Right to speech and expression, and to an extent, Right to free trade and business, but in the broader perspective of the welfare of the state, it needs to curtail such powers of dominance by bigger players.

Give me some sunshine, give me some rain..

Schools once had a playground. That statement is not so far away from becoming a fact with rising problems of land and more focus on studies than sports. Now a days, schools and colleges are turned into pure profit making organizations with sole motto of earning profits. How to earn is no more a problem for them. Make students struggle like donkeys, make them get one of the top ranks in states and there we go.Parents become ready to spend lot of bucks on their wards to get into those best schools with top ranks.

                  However every one is missing the fact that "All work and no play make Jack a dull boy". People need to understand that by sending our kids to such schools we are playing with their childhood.We are depriving them of their innocence.We can understand the difference by comparing our childhood to their childhood.We had outdoor games, they have mobile games. We felt good by making new friends, they just want new facebook friends.Due to technological advancements, relations are already getting least priority in this fast paced life, and without sports, we are making it even more difficult for them to understand team work. Above all, their health itself is at big risk without any physical exercise.

          I hope parents start realizing the importance of sports which unfortunately is given low priority in developing countries like India where studies matter the most. I hope our future generation is not forced to sing this song " I tried so hard and got so far but in the end it doesn't even matter"