Legal Actions for New Nirvana Ltd - MyAssignmenthelp.com

Question: Discuss about theLegal Actions for New Nirvana Ltd. Answer: In this case negligence of one party and case of separate legal entity has been described for the better understanding of this holding and subsidiary law has been given to determine the damages occurred to audiences Case Issue In this case, it is given that New Nirvana Ltd has several subsidiaries companies which are indulged in providing strategic alliance to the company. However, due to main negligence of one of the subsidiary company named Nuclear Blast, it had resulted to the hearing loss to five members. Now these five members want to take compensation from the main holding company New Nirvana Ltd for their losses (Goulding, 2013). Rules In this case separate legal entity and corporation act will be applied which will define the legal liabilities of wholly own holding company for the negligent of subsidiary company. In this case, Corporation act will be applied. Moreover, law of separate legal entity will be applied to identify the party which would be liable to compensate the loss occurred to parties Applicability In this case, members who were suffering from the hearing loss wanted to take the compensation from the holding company of the subsidiary company. In this case, law of separate entity has been implemented. Therefore, in order to implement the legal liability of New Nirvana Ltd corporation act and spate legal entity concept has been applied (Hoenen and Kostova, 2015). Conclusion In this case five members have suffered hearing loss due to the negligence of the subsidiary company of New Nirvana Ltd named Nuclear Blast. After evaluating this case and corporation law, it is determined that company is separate entity and no other wholly owned subsidiary company and members of the company held liable for the wrong act done by other associated company unless otherwise provided. In this case hearing loss due to the negligence of the subsidiary company of New Nirvana Ltd named Nuclear Blast hearing loss due to the negligence of the subsidiary company of New Nirvana Ltd named Nuclear Blast. These members who have suffered hearing loss could only ask for compensation only from Nuclear Blast for its negligence. New Nirvana Ltd is separate legal entity and wholly owned subsidiary company. This company cannot be held liable and cannot be asked to pay compensation for the negligence act of Nuclear Blast unless it was accustomed to act as per the instruction and directions given by New Nirvana Ltd. Therefore, in this case it would be inferred that members who have suffered loss from the negligence of Nuclear Blast could take compensation from only this Nuclear Blast Company. If members who have suffered hearing loss could prove that Nuclear Blast is accustomed to act as per the instructions and orders given by New Nirvana Ltd then only holding company could be held liable. As per the Corporation act, company is separate legal entity which has distinct identity in the eyes of law. No holding company could be held liable for the wrong act done by its subsidiaries company unless otherwise provided. This report is consisted with the facts and issues which have been used to determine where case should be gone at the time of conflict between parties. All the parties to the company has made covenants in the AOA of company that in case of conflict, members to the company will go to arbitrator before going for legal case. In this case, legality of AOA and its covenants have been taken into consideration. Issue Case This case is accompanied by the laws and regulations associated with Article of association and corporations laws. In this case, promoters of company Simon, Michel and Don had included various terms and points in the article of association of promoted company. In the article of association of company it is given that if members of company will have any kind of conflict then they would instead of presenting their case in court would go to arbitrator appointed by mutual consent (Lipton, 2014). Rules As per the given case EEY vs. positive life assurance company limited 1876 it was held that if AOA of the company formed by promoters of the company is unusual one, in particular regarding enforcement of rights which are related to the parties outside the contract then that contract and points held in the annual report would be held illegal (Ballantine, 1925). The prepared AOA has been made beyond the legal terms. It is evaluated that this case would be followed as per the rules and regulations given under the corporation act. Applicability This case is consisted of various facts and laws related to the corporation acts and laws. In this Millennium Company, AOA contains various terms and contract which are made with a view to bind members and directors of company. All the contracts and conditions put in AOA are not as per the corporation act. Therefore, the act done by Don against the Millennium is against the law (Foss v Harbottle(1843) 67 ER 189). However, covenants set up in AOA is ultra violate and it cannot bind any third person and it is fundamental right for each and every person to go to the legal proceeding in court in case they find any conflict in their act. Therefore, Don can go to court for presenting his case. Conclusion In this case, all the members of Millennium company have put a point in its AOA that if members of the company will have conflict with each other then they will firstly go to arbitrators before going to any legal proceeding. However, other members Simon and Michel intended to fire Don from the position of Solicitor for the land and building. In order to refrain this act, Don has filed legal action against Simon and Michel. However, as per the terms and conditions of AOA of Millennium Company, in case of conflict between members arbitrators will be appointed to solve the questions then other legal actions will be taken into consideration. EEY vs. positive life assurance company limited 1876 it was held that if AOA of the company formed by promoters of the company is unusual one, in particular regarding enforcement of rights which are related to the parties outside the contract then that contract and points held in the annual report would be held illegal (Reisberg, 2005).Therefore, Don could easily go the legal actions and jurisdiction for the disputes between other members (French et al, 2014). References Goulding, S., 2013. Principles of company law. Routledge. Hoenen, A.K. and Kostova, T., 2015. Utilizing the broader agency perspective for studying headquarterssubsidiary relations in multinational companies. Journal of International Business Studies, 46(1), pp.104-113. Ballantine, H.W., 1925. Separate Entity of Parent and Subsidiary Corporations.California Law Review, pp.12-21. French, D., Mayson, S., Mayson, S.W. and Ryan, C., 2014.Mayson, French Ryan on company law. Oxford University Press, USA. Lipton, P., 2014. The mythology of Salomon's case and the law dealing with the tort liabilities of corporate groups: an historical perspective.Monash UL Rev.,40, p.452. Reisberg, A., 2005. Shareholders Remedies: The Choice of Objectives and the Social Meaning of Derivative Actions.European Business Organization Law Review,6(2), pp.227-268.