Is A Parent Company Bound By Contracts Of Its Subsidiary?

Companies doing business on an international basis can take welcome comfort from a recent Court of Appeal decision, which confirmed the approach for when a corporate veil will be lifted. "Lifting the corporate veil" describes a practice by which a court decides that a subsidiary is a mere shell or alter ego used by a parent company to avoid or conceal liability. By piercing the corporate veil, the court treats that parent and subsidiary as a single economic entity, thereby placing the debts and liabilities of the...

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