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Corporate veil: Difference between revisions
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{{a|devil|}}In a formal legal context, the ontological fiction by which a corporate personality is distinct from the persons owning and running it. | {{a|devil|}}In a formal legal context, the ontological fiction by which a corporate personality is distinct from the persons owning and running it. | ||
This is all great japes if your taste runs to jurisprudential conundrums. | This is all great japes if your taste runs to jurisprudential conundrums. | ||
===[[Meatware]] versus bookware=== | |||
In the dirty world of modern financial services, it presents itself in a different way: the difference between ''what your employees know'' and ''what your systems know''. | |||
Here, the [[legal entity]], sitting primly behind its veil, is [[Short an option|short a rather ugly option]]; one which tries the patience of [[legal eagles]] — who have to row it back when, as inevitably it will, everything goes Pete Tong — and of [[salespeople]] and other [[risk controller]]s, who will find the [[legal department]]’s softness when challenged utterly confounding. Why is it that legal contracts never do what they’re meant to when you need them? | |||
For it is all very well crafting | For it is all very well crafting elegant [[disclaimer]]s, [[exclusion]]s, and restrictions on [[liability]], but all of this amounts to a small heap of potatoes if in the intervening period, your [[salespeople]], in their priapic enthusiasm, have promised the known world to their clients, in direct contradiction to your legal figures. Be assured: what your clients will remember will be not the dusty syntactical contortions you buried in a master agreement 15 years ago, but the vibrant — often lurid —assurances your [[salespeople]] made to them over a few glasses of ''Château de Chasselas''<ref>Passable, very passable.</ref> during the interval of a rousing presentation by ''Cirque du Soleil''.<ref>God rest its merry soul.</ref> They will recall these in cinematic detail. The [[verbiage]], on the other hand — when you can find it — will be shot through with ambiguities, caveats and concessions some put-upon negotiator made to avoid dying in a ditch about them and, in any case, will lose in any argument between subsequent conversations and the written record. | ||
So here is the thing: you have the ''social organism'' that is a multinational financial services firm that bumps around the market ecosystem like an ineffable, shape-shifting,our-of control dirigible — this is the huge collection of employees, consultants, contractors with whom you interact each day — and you have the convoluted array of electronic books and records that represent that firm in the opinion of its risk controllers and upper management — its client static data, trading systems, executed document repositories, accounts, margin systems and accounting treatments. | So here is the thing: you have the ''social organism'' that is a multinational financial services firm that bumps around the market ecosystem like an ineffable, shape-shifting,our-of control dirigible — this is the huge collection of employees, consultants, contractors with whom you interact each day — and you have the convoluted array of electronic books and records that represent that firm in the opinion of its risk controllers and upper management — its client static data, trading systems, executed document repositories, accounts, margin systems and accounting treatments. | ||