Case Study Of Buildco Ltd

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Register to read the introduction… Such as the Buildco Ltd in the case have its subsidiaries in more than 10 countries. Subsidiary company is half of the shares are controlled by the parent company. That is to say, most of subsidiary’s property was controlled by the parent company, but the subsidiary and the parent are still separate legal entities, with all its assets shall undertake limited liability for its debts, the parent company is based on its capital contribution or subsidiary to the holdings of shares in the limit of responsibility. As to the Buildco Ltd is the holding company which controls the subsidiary’s (Asset Ltd Pty) board of the director and also is in position to cast or control maximum votes at subsidiary’s general …show more content…
It is conspicuous to discover that the parent company (Buildco Ltd) was established in 1950, and become the one of the world’s leading international building companies via its own skills. 6. Was the parent in effectual and constant control?
Yes. The case shows that the CEO of the parent company (Buildco Ltd) has been helm the company for nearly 20 years. In addition, the parent company (Buildco Ltd) made a large profit and strict policy.

In summary, there is an agency relationship between the parent company (Buildco Ltd) and the subsidiaries company (Asset Pty Ltd). That is to say, they can be treated as a single legal entity, so the subsidiary company (Asset Pty Ltd) would not write-off the loan to the parent company (Buildco Ltd) as a debt and could not claim a tax deduction for that debt. Instead, there is a similar case which is called Commissioner of Taxation v BHP Billiton Finance Ltd (2010), the court held that the bad debt can be deducted due to the fact that the Commissioner’s submissions denying the separate legal existence of Finance Ltd. However, there are two differences between the two cases. Firstly, in the Commissioner of Taxation case, the reason of building the subsidiary company is not only solves the problem of sourcing debt finance, but also deals with the third parties. In contrast, the subsidiary company (Asset Pty Ltd) has no deal with other companies, except the parent company (Buildco Ltd). In addition, in the case of Commission, the BHP
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Professor Sharon Christensen and Professor Bill. (2012). lifting the joint venture veil: liability of related entities for misleading conduct of agents engaged by joint venture partners. DuncanAustralian Property Law Bulletin (newsletter), 2012: Volume 26 No 8.

5. Ramsay I and Noakes D. (2001). Piercing the Corporation Veil in Australia. company and securities law journal, 2001: Volume 19 No 250.

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[ 1 ]. Australia Statute Law, s558v
[ 2 ]. Walker v Wimborne (1976) 137.
[ 3 ]. Limited liability exception - the UK's "lifting the veil of the Company", < http://www.law-walker.net/detail.asp?id=4511>
[ 4 ]. Lonrho ltd. v. Shell Petroleum Co., Ltd. (1980).
[ 5 ]. Salomon v Salomon & Co Ltd (1897) AC22.
[ 6 ]. Australia Corporation Law, s46.
[ 7 ]. Ramsay I and Noakes D, ‘piercing the Corporate Veil in Australia’ (2001) 19 Company and Securities Law Journal 250.
[ 8 ]. Smith Stone & Knight Ltd v Birmingham Corp (1939) 4 ALL ER116.
[ 9 ]. Smith stone &Knight Ltd v Briminghan Corp (1939) 4 All ER 116
[ 10 ]. Commissioner of Taxation v BHP Billiton Finance Ltd (2010) 182FCR
[ 11 ]. Harris J, Hargovan A and Adams M Australian Corporate Law, 3rd ed 2011, LexisNexis Butterworths

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