Critically Examine the Interaction of Environmental Protection

Corporate Personality and Environmental protection

The concept of corporate legal entity/personality is formulated to pierce the veil of corporate. This concept states that company is distinct from its members. After incorporation of the company its status is changed as a separate legal person apart from its directors, founders and members. There are three important case laws to explain the concept of separate legal entity these includes -

Oakes V Turquand (1867),

Salomon V Salomon & co ltd. (1897) and

Lee V Lee's Air Farming Ltd. ()

The idea of corporate personality was formulated in the case of Oakes V Turquand it was decided in the above case that when an individual has been drawn in to make or enter in to a contract of buying the shares where the intention of the directors has always been to Example of Assignment help defraud the person or concealing the facts if that had been exposed then the person should not have entered in to the contract has been provided here then directors cannot implement the contractual obligations against that person but he may be ale to revoke it. This revocation should be done within the reasonable time frame only. The contracts which arise due to the intention to defraud someone does not become void but voidable. Due to this the persons who were induced by fraud may not enforce it

Another landmark case is the Salomon V Salomon & Co Ltd. one Mr. Solomon who formed the company and the principle business of this includes manufacturing leather boots. The memorandum of the company stated that there were 7 subscribers Salomon, his wife, daughter and the 4 sons. When company went into liquidation after 1 year the 2 issues have rose. These includes having limited funds so the main questioning comes to who will receive their share of money out of the creditors. And if the managing community consist of only 1 family then the identity of the family and the business should be explained whether it is same or different. In this case the honourable court have given its judgement in the form of stating that company has its own legal persona and should be defined as the separate entity apart from it s members.

In case of Lee V Lee Air Farming Co. Ltd where the total share capital of the company was 3000 shares where Lee held 2999 shares. He was the chief pilot of the company and director and this was solely declared by him. During this time the plane of Lee crashes and he dies. Among the company & its employees there is connection of master- servant which care to explain that during the time of course of action if any misfortune event happens then the compensation cost will be beard by the master only.

The issue of compensation will going to be the necessary component here, as the widow of Lee has demanded the compensation from the company. The issue was will she be able to claim compensation and was the company being the separate legal entity or not.  The insurance company said that the director of the company was Lee only and he will be the responsible party in this case and both Lee and the company are same and have no difference between them.  Court decided that it does not matter the quantity of shares of the company Lee and his company was not the same persons. Also, the compensation which the wife of deceased Lee have demanded from the company will subsist as Geology Topics Lee and the company were both different separate legal beings having their own set of rights and liabilities. This concept is known as the concept of separate legal entity or the concept of legal personalities. This concept made sure that after incorporation the company is separate from its members.

The provided case study of Okpabi and others v Royal Dutch Shell Plc and another where former being the appellants and the Royal Dutch Shell Plc being the respondents in this case. The case was of the opinion that whether the UK-domiciled parent company will be held liable in case of owing the duty of care to people who assert that they endured grave injury due to the so-called general well-being, precaution and environmental neglects of one of the foreign auxiliary as the manipulator of an associated undertaking procedure. The court has used the rigorous framework in valuing the concept of corporate detachments. It had allowed the appeal of the claimants in this case and have said that this have much wider implication regarding the English domiciled companies trading worldwide with help of overseas subsidiaries around the globe.

It has been explained in the Companies Act 2006 that parent company will be held responsible for the actions of its first tier subsidiary having significant control over it. To make the parent company liable for the action of overseas subsidiary or owe the duty of care towards the third parties will be applicable on the following cases -

• The parent company also jointly managing the operation,
• Providing the defective advice to the subsidiary company,
• Issuance of group wide compliance and regulator policies is instrumental in implementing those and
• Holding itself out as supervising or controlling the subsidiary.

This concept although does not intend to pierce the veil of corporate but establishing the fact that  they owe direct duty of care to certain companies and should be separated from its subsidiaries at times. In the recent case which happened in 2012 the Court of Appeal in case of Chandler v Cape held that Cape, being the parent organization, owed a duty of care to a worker of one its auxiliaries to defend him from the injuries which h eh ave suffered at workplace. The Court of Appeal reached this decision in from the following evidence:

• The intersection among the businesses of the parent organization and the subsidiary;
• The parent company have the superior cognition on the applicable wellness and safety problems
• The parent company knows or either have the reconstructive cognition regarding the safety of the subsidiary methods of work and lastly
• The parent organization knows (or having ought to known) that the subsidiary would believe the knowledge of its parent company and have complete faith on them.

Corporate Governance and CSR

Corporate Governance is the way in which company will be governed on and deciding the purpose of it. It plans to divide the authority before stating who have the power and the responsibility and up to what content. These includes the framework which direct the management in understanding the working and the manner in which the company will work in future and the kind of work Science Research Topics which the company will be doing. It provides the assurance that the company have proper decision-making procedure and control on point so that the curiosity of every stakeholder be it shareholders, workers, vendors, clients and the citizens are counterbalanced.

The term Corporate responsibility (CR) is all about the effect a company or an  organisation have on the society, the environment and the economic system. Possession of an impelling CR curriculum contribute in a positive manner to every stakeholder and also adding worth for the system itself, and guarantee that it runs in a sustainable manner. It is different from environmental, social and governance (ESG), which mostly sees how third person reckon the establishment. The brochure discusses why corporal obligations are mattered, and shed light on the role of HR in implementing this. Elements and procedure which influences corporate obligations consider legitimate and intentional standards, relationships with outer authorities, and societal and environment reportage. This report also explain the present-day debacles on corporate duties, analysing the dual elements of its proponents and antagonists. This will provide a conclusion and the needed framework of the responsibilities and the duties which introduces the corporate responsibility action plan which aims to apply it on employers and professional peoples.

The sphere corporate duty generally fall into 4 key areas and these includes -

Workplace - This area will deal with the issues which arise at workplace and making the area more productive

Market place - the impact or the consequence of the commodities and the services which are provided by the organisation and to see if they follow all the statutory requirements of taxes, fair and just trading and anti-bribery needs.

Environmental - The impact of the products and services have on the environment and it can be reinforced or decrease the impact.

Community - This framework deal with the contribution of the organisation on the society and see if it effects the society in a good way and provide to the society.

In case of ClientEarth V Shell Pl and ors (2023), in this case the appellants have filed a suit against the Board Of Directors of the Shell plc in the High Court of England and Wales for the allege severance of the fiduciary which they needed to perform under the Companies Act, 2006. As per the ClientEarth, the Board of Directors of Shell plc have been unsuccessful in putting the energy shift strategy in to the place which is in consistent with the Paris Agreement, accelerative of the vulnerability of Shell plc to risk the climate and impeding the lengthy time period commercialised practicality. This investigation determines the legitimate grounds of ClientEarth's assertion in light of the UK's company law framework, and also High Court judgements of May and July 2023 dismissed the petition of ClientEarth's. It argued that, neglecting the deficiency of concrete lawful grounds for ClientEarth's differential assertion, this case may serve to boost or augment the goals which are related with climate. More specifically, the investigation indicate on how this conflict grounds the increasing disparity among the subjective s of environmental law on the 1 side and those of company law on the another side. The High Court have dismissed the petition of the ClientEarth in launching the special petition against the directors of Shell plc. It has been observed the court that these claims have been initiated by the minority shareholders who definitely have the right o file petition but does not constitute the actual investors in the company.

In these type of cases court have placed important emphasis up on the reality that directors (particularly those of big transnational companies) have to equilibrate an infinities of competitive thought process when looking to encourage the prosperity of the organization for the welfare of the associates as a whole. Courts are disinclined to hinder with the decent equalization of these constituents, which in turn makes it difficult for the applicants to set up that the directors had failed in fulfilling their duties which are of statutory nature. Applicants are the ones who face the encumbrance of showing that the particular intention of the differential title is not for a distant need. It might pose demanding for the appellants such as NGOs or reformist companies to establish that they are bringing the assertion in a bona-fide manner. This problem is probably be much more intense where the applicant holding only “de minimis” shares within the company. Meaning the minority shareholders.

In case of BHP litigation concerning the Fundao dam collapse ( Municipio de Mariano and BHP Group (UK) Id and another (2022), the litigation proceeding have started by more than 200,000 Brazilians where one Fundao dam have collapsed in 2015. the landmark case in terms of UK-domiciled parent companies and its administration and activeness of their global subsidiaries and combined undertakings of the companies which their auxiliaries (in turn) own. This case the worst environmental disaster of the Brazil where approximately 40 million cubic metres of venomous waste material from iron ore production, fatality includes 19 people, demolishing the  total community, and impacting many people and local people. The people who have filed the application consisted of indigenous communities, faith-based establishments, etc. At last that there was a practical potentiality that an English suit would return an actual and rightful benefit for the applicant and this librate the disadvantages in terms of disbursement and tribunals root, the Court permitted the unit judicial proceeding to continue to trial.

Rights and Remedies of Shareholders

The word rights and obligations are considered as the part of the same coin. Shareholders are the persons who have bought the shares of the company and technically are known as the owners of the company. The term rights of the shareholder means having some contractual rights which the shareholder have attained while purchasing the shares as part of the contract. In laymen terms it is known as the power to necessitate some other being to accomplish their own duty in one's own disposition or involvement. If they do not, one can finally request the honourable court to command them to do so or to wage out the sum of money to one's own at the time of failing the other person to do so.

The rights of shareholder includes, receiving the share certificate or the proof of holding the shares within 2 months of acquiring the shares, can start the petition against the company in the court of law in case of their rights being hindered, have the right to receive the dividend and are entitled to get their money or money's worth at the time when the winding up of the company is happening.

Call general meetings- Shareholder having more than or equal of 5% of voting rights can call the meeting of the shareholders. This can b e done in case of directors failing to call the meeting, then only they can call the meetings of the shareholders.

Possess voting rights - they have the voting right available to them and can decide in appointing or removal of directors and also have the right to enforce certain decisions in favour of them.

Can review the accounts of the company - They have this absolute right granted by the Companies Act, 2006  in which they can review the accounts of the companies and raise objections to the business of the companies.

There exists three main remedies to the shareholders whenever they think their rights have been harmed, it includes

• Fair and equitable winding up (Companies Act, 2006 and Insolvency Act 1986)
• Unfair bias petitions (Section 994 and 996 of the Companies Act 2006)
• Differential Title

They can enforce these rights whenever they feel that their rights have been hindered with or at the time of unfair practises where they can seek judicial measures against the aggrieved shareholders and can also have look for injunction relief and at the time of winding up of the organisation. These remedies are available to minorities shareholders so that their rights are protected and establish the equity inside the organisation.

Derivative Action - The persons who can bring the claim under Companies Act 2006 includes company members, fiduciary or personal representatives holding shares in the company can start the title against a director in lieu of that company because of something that the director did or proposed to do (or didn't/proposed not to do) which was neglectful,in default, in breach of their responsibility, or in severance of reliance in respect of their actions and duty towards the organization. This is known as the ‘derivative claim'. In some circumstances, a shareholder can even take over a derivative claim that was started by the company itself.

CONCLUSION

To conclude the above essay it can be said that corporate personality is known as the company different from its members which can be explained in the above case law and the instrumental case being the Salomon V Salomon Ltd. The essay also deals with another instrumental concept of corporate governance and CSR. Lastly the rights and remedies of shareholders are explained in the above essay.

REFERENCES

Books and Journals

Clientearth v Shell Plc & ORS: No prima Facie Case for Derivative Claim to Proceed against Directors' (Michelmores, 10 November 2023) accessed 2 December 2023

London Court Reopens $7bn Brazil Dam Collapse Lawsuit against BHP' (The Guardian, 28 July 2021) accessed 2 December 2023

(Clientearth v Shell Plc & Ors [2023] EWHC 1897 (CH).) accessed 2 December 2023

Conmy S, ‘What Is Corporate Governance?' (The Corporate Governance Institute, 25 September 2023) accessed 2 December 2023

Fadnes I, ‘Brazil's Fundao Dam Collapse: The Silence after the Mud' (Al Jazeera, 14 June 2016) accessed 2 December 2023

Ltd AA, ‘Salomon v Salomon - Case Summary' (LaFadnes I, Brazil s Fundao Dam Collapse: The Silence after the Mud' (Al Jazeera, 14 June 2016) accessed 2 December 2023 w Teacher, 6 November 2023) accessed 2 December 2023

Murray J, ‘What Does Piercing the Corporate Veil Mean?' (The Balance, 12 July 2021) accessed 2 December 2023

Participation E, ‘Companies Act 2006' (Legislation.gov.uk) accessed 2 December 2023

Posted by Business Roundtable on, ‘Principles of Corporate Governance' (The Harvard Law School Forum on Corporate Governance, 8 September 2016) accessed 2 December 2023

Rahim MM and Alam S, ‘Convergence of Corporate Social Responsibility and Corporate Governance in Weak Economies: The Case of Bangladesh - Journal of Business Ethics' (SpringerLink, 15 May 2013) accessed 2 December 2023

Sahut J-M, Peris-Ortiz M and Teulon F, ‘Corporate Social Responsibility and Governance - Journal of Management and Governance' (SpringerLink, 28 September 2019) accessed 2 December 2023
Read More-: Feminist International Relations

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