On the other hand, they spilt the proceeds of $75,000 among themselves. With these, EX. Pete Ltd has a reason to suspect that Sam and Alicia had the intention of cheating EX. Pete Ltd of the goods. Therefore, EX. Pete Ltd could lodge a complaint to CAD on BBC Pete Ltd as they have committed a commercial rime. After EX. Pete Ltd lodges a report, CAD will proceed with the investigation.
Once they have sufficient evidence to prove that Sam and Alicia have committed a commercial offence, both of them will be charged in court. [Commercial Affairs Department, FAQ, Information for complainant, Para 5] 5) Piercing the corporate veil Under the general rule, the incorporation of a company creates “Persephone”, which the liabilities are limited to the company itself, but not to the members of the company. [s 19(5) CA] However, in the situation of injustice and unfairness, the court may pierce the reporter veil and impose the liability on the members of the company.
Don’t waste your time!
Order your assignment!
The corporate veil may be lifted in the following situations: – If a company is wounded- up or sued and has a debt that was created by a company officer on purpose, the officer has committed an offence and can be fined or Jailed and be personally liable for the debt [sass(3) and 340(2) CA]; – If a company has the intention to defraud creditors or for any fraudulent purpose, upon winding-up of the company, the court may declare that the person who knowingly carries out the business be personally liable for the debts or liabilities of the company [s 340(1) CA].
In the case of BBC Pete Ltd, Sam and Alicia purchased the goods at $100,000 and re-sold it at $75,000, resulting in a loss of $25,000. Proceeds among themselves. This shows that they had purposely defraud EX. Pete Ltd of the $100,000 worth of goods and did not have the intention to pay EX. Pete Ltd at all. With this, the court can also make both of them be personally liable for the debt of $100,00 due to EX. Pete Ltd. [Children’s Media Ltd and Others v Singapore -rounds Board (2009)].
Conclusion Based on the above findings, EX. Pete Ltd has sufficient reason to suspect that Sam ND Alicia had the intention to defraud EX. Pete Ltd on the goods supplied to them. This is supported by the fact that the goods were purchased on credit of $100,000. Subsequently, they were sold off at $75,000 and the proceeds were spilt among them instead of using it to repay for the debt. When EX. Pete Ltd approached them for payment, they were told that the company was cash-strapped, therefore unable to repay the debt.