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Veil of incorporation question

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA LW Exams › Veil of incorporation question

  • This topic has 3 replies, 2 voices, and was last updated 10 months ago by MikeLittle.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • March 31, 2022 at 10:17 am #652387
    Safiya.12345
    Participant
    • Topics: 61
    • Replies: 111
    • ☆☆

    Dere was an employce of Bow Co. His contract had a valid restraint of trade clause prohibiting him from setting up a competing business should he leave their employment. Derek has since left Bow Co and has formed a company Profile Co, which is now competing with Bow Co.

    Can Bow Co prevent Profile Co from competing with it, and for what reason?

    1.No, because the restraint clause only applied to Derek and not to Profile Co

    2. No, because Profile Co was not in existence when the restraint clause was incorporated into the contract

    3.Yes, because Derek is using Profile Co to evade his own legal obligations

    4.Yes, because Derek and Profile Co are regarded as the same person
    Is 2 the ans or 3 ,2 cuz the clause clearly stated if he establishes a business he should leave his employment so he did leave his employment and formed after that a competing business .( plz explain)

    April 1, 2022 at 4:00 pm #652521
    MikeLittle
    Keymaster
    • Topics: 26
    • Replies: 22712
    • ☆☆☆☆☆

    The clause does NOT say that if he establishes a business, he should leave. The clause says that ‘if Derek leaves the business, he must not set up a business in competition with his previous employer’

    The ‘facts’ that you’ve given me are not hugely dissimilar to the facts of the case Gilford Motor Company v Horne

    In that case, Horne was found guilty of setting up a company to compete with his former employers where he was prevented by contract from personally competing with it

    OK?

    April 1, 2022 at 11:52 pm #652548
    Safiya.12345
    Participant
    • Topics: 61
    • Replies: 111
    • ☆☆

    thank u so much sir

    April 2, 2022 at 7:13 am #652553
    MikeLittle
    Keymaster
    • Topics: 26
    • Replies: 22712
    • ☆☆☆☆☆

    You’re welcome

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