THE DOCTRINE OF PIERCING THE CORPORATE REVIEW IN THE COURT DECISION NO. 656/PDT.G/2015/PN.MDN

Limited Liability Company (Ltd.) or Perseroan Terbatas (PT) is a legal entity in Indonesia that constitutes a capital alliance formed by an agreement that features a limited liability principle. Limited liability is a principle that limits the responsibility of shareholders to the risk of the Company. However, the principle of limited liability is frequently misapplied, as shareholders look for ways to protect themselves from the risk of more significant losses, to take advantage of all company profits for personal gain. Shareholders who abuse the principle of limited liability for personal gain, on the other hand, will be subject to the Piercing the Corporate Veil doctrine. This doctrine imposes the transfer of liability for personal losses to shareholders who cause harm to the company in bad faith. Based on this understanding, this paper seeks to comprehend the application of the Piercing the Corporate Veil doctrine by analyzing Medan District Court Decision Number: 656/Pdt.G/2015/PN.Mdn. The research method used in this study was normative legal research reviewed with a statute approach and a conceptual approach. The conclusion drawn from the problem is as follows: the regulation regarding the Piercing the Corporate Veil doctrine is borne not only by shareholders but also by the Board of Directors and the Board of Commissioners who fail to implement the principles of fiduciary duty of skill and care. Furthermore, in the case of 656/Pdt.G/2015/PN.Mdn, the judge considered the provisions of Article 3 paragraph (2) of the UUPT in implementing the Piercing the Corporate Veil Doctrine by punishing the Defendants jointly and severally to indemnify the Plaintiff.

PERTANGGUNGJAWABAN PEMEGANG SAHAM PERSEROAN TERBATAS MELALUI INDIKATOR ALTER EGO DALAM PENERAPAN DOKTRIN PCV DI INDONESIA

Penelitian ini ditujukan guna memahami tujuan dari diadopsinya alter ego sebagai indikator dalam penerapan doktrin piercing the corporate veil (PCV) dan konsep pertanggungjawaban harta pribadi pemegang saham dalam Undang-Undang Nomor 40 Tahun 2007 tentang Perseroan Terbatas (UUPT 2007), serta mengukur efektifitas dari perlindungan hukum yang diberikan melalui penerapan alter ego sebagai indikator doktrin PCV tersebut. Penelitian ini merupakan penelitian yuridis normatif yang dilakukan melalui penelitian kepustakaan dan dianalisa dengan metode penelitian kualitatif atas data sekunder yang ditemukan. Hasil penelitian menunjukkan bahwa pertanggungjawaban pemegang saham pada suatu PT, hanya terbatas pada sejumlah saham yang mereka miliki. Saat ini, karakteristik pertanggungjawaban terbatas dan badan hukum yang terpisah ini sering disalahgunakan untuk menciptakan tameng bagi para pemegang saham. Guna mencegah praktek yang menyimpang ini, doktrin PCV telah diadopsi oleh UUPT 2007. Namun demikian, doktrin PCV tersebut hanya diadopsi secara setengah-setengah. Begitu pula dengan alter ego sebagai indikator yang mana penerapannya tidak efektif dan jarang digunakan.

The Sword Hanging High—Discussion on the Enlightenment of the “Piercing the Corporate Veil” System to Company Operation and Its Effects

“Piercing the corporate veil” system is a subversion and exception to the company’s independent personality system and the shareholder limited liability system, but these two are dialectically unified, which are like two sides of a coin. Enriching and improving the legal person system can pave a smooth way for the construction of a fair and legal business environment. Through case study, analysis and comment, this article will explore what enlightenment and guiding role “piercing the corporate veil” system has in corporate operation, and how to ring the alarm to operators and shareholders. Through case study and review, this article summarizes the practical effects of “piercing the corporate veil” system, and help readers have a deeper understanding of the important status of this system.

Limited liability companies in Jordan: another story for piercing the corporate veil

Purpose In different recent judgments, the Jordanian Court of Cassation, among many other Jordanian Courts, has found that a limited liability company's shareholder may be held liable in addition to the company itself as to claims related to the company's debits and different obligations. While the aforementioned approach does constitute a departure from the well-established former approach that the same Court has followed for a long period, the Court have unsurprisingly brought up different interpretations to the insufficient provisions that the Jordanian Companies' Law no. 22 of the year 1997 does contain pertaining this specific area of law. Accordingly, this paper aims to attempt to point out and critically examine the aforementioned Courts' decisions and law provisions to demonstrate the extent to which limited liability companies in Jordan are truly limited in liability and whether such Courts have pierced the corporate veil for adequate reasons. Design/methodology/approach To examine the extent to which limited liability companies in Jordan are truly limited in liability, this work uses the most relevant secondary data available in this relation as the main method to complete such examination and this shall include different interrelated law provisions, case law and jurisprudence. Through critically analyzing and comparing such data, this work will identify the problems connected to this specific area of law and accordingly proposes different recommendations and conclusions. Findings This work submits that the aforementioned Courts and Legislator have not dealt with such a matter in an adequate and comprehensive manner and that they should have addressed this area of law in a different and more specific way. Furthermore, this work argues that while the reasons behind the Courts' decisions shall be respected, the distinct characteristics that brought up limited liability companies into practice shall be also respected and left intact. Originality/value Taking into consideration the recent different approach followed by the Jordanian Courts to this specific area of law, and as far as the author is aware, it would not be surprising to say that there is no comprehensive and updated scholarly work which has either examined such an issue or addressed its implications from technical and legal standpoints. This paper receives its originality and value from being the first work that examines and addresses such important matter.

Enlightenment of American Legal Theory and Practice of "Piercing the Corporate Veil" to China

Observing the current legal system and theory of America, "piercing the corporate veil" is in a state of "chaos" in both of them. How can China learn from the rule of law and the theory of "piercing the corporate veil"? How to avoid its harm and gain its benefits? Due to different national conditions and judicial systems, also differences between civil law system and common law system, and at the same time, the world is in the era of globalization, the exchange of legal culture of Chinese legal system is expanding and deepening day by day. Therefore, it is necessary to study the rule and theory of "piercing the corporate veil". This paper systematically summarizes the current situation of the rule and theory of "piercing the corporate veil" in America, explores the causes of the confusion, and puts forward some suggestions to prevent the occurrence of problems in China after transplanting this rule, which is very necessary and timely.

The Enforcement of Environmental Damages Judgement as a Basis for Piercing the Corporate Veil within a Corporate Group

The present article, on the basis of the high-profile Chevron case, rethinks the principle of corporate veil within a corporate group. It tries to convince the reader that a plaintiff holding an environmental damages judgement should be able to enforce it against any company in the corporate group of defendant regardless of the fact that such company was not a defendant in the underlying action (the new test). To attain this goal, firstly, the basic notions as an “environmental damages judgement,” a “corporate group,” and “the corporate veil” are explained. The article then elaborates on the importance of the corporate veil principle. Furthermore, it describes what would currently constitute a potential ground for piercing of the corporate veil in Canada. Later on, it provides a three-level justification for why the veil, in the described circumstances, should be pierced. Finally, the new test regarding piercing the corporate veil is proposed.

5. Corporate personality

This chapter deals with the legal personality of a company which is separate from its members, capable of owning property, entering into contracts and being a party to legal proceedings. It considers the case Salomon v A Salomon and Co Ltd [1897] AC 22, in which the House of Lords affirmed separate corporate personality by rejecting attempts, on behalf of creditors, to impose liability for a failed company’s debts on its controlling shareholder. The consequences of separate corporate personality are also discussed, particularly with respect to a company’s human rights (or personal rights). In addition, the chapter examines the process known as ‘piercing the corporate veil’ in relation to the evasion principle; how an artificial entity can have legal personality; and a number of particularly significant court cases. Finally, it looks at corporate law theory and considers whether companies are grammatically singular or plural.

PIERCING THE CORPORATE VEIL

The subject of the paper is the institute of piercing the corporate veil – the review of norms as well as court practice cases related to the application of this institute. The primary goal of this paper is detailed presentation of the institute of piercing the corporate veil, as an important exception from the principle of limited liability with certain forms of companies and recognition of important significance that is still not entirely used in practice. The conclusion from research is that it is necessary to provide a more precise and clearer positive legal regulations of this institute in order to unify court practice and facilitate creditors in applying and proving rights through the institute of piercing the corporate veil. With more precise regulation of legal provisions and positive examples of court practice, the creditors would be encouraged to use this instrument more frequently. Methods used in this paper include dogmatic method, normative method, comparative method as well as axiology method, explained in more detail below.