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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. | |||
This is all great japes if your taste runs to jurisprudential conundrums. | |||
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. In this regard, the [[legal entity]] 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 [[salespeople]], who will find it utterly confounding that legal contracts never do what they’re meant to when you need them, alike. | |||
For it is all very well crafting elegance [[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 clever legal figures. Be assured: what your clients will remember will not the dusty syntactical contortions you buried in a master agreement 15 years ago, but the vibrant — often lurid —assurances 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> | |||
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. | |||
These two things are very different, and the risk between them is asymmetrical: Any accommodation granted by the social organisation to the outside world is, to all intents, binding — either through ostensible authority, but more realistically because the [[commercial imperative]] so dictates — ''whether or not that accommodation makes its way into the firm’s [[books and records]]''. But a benefit — an accommodation granted ''to'' the firm ''by'' the outside world — that does not make it into the firm’s books and records is meaningless. | |||
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*For some crazy law chat on the historical concept of the [[corporate veil]], see {{casenote|Salomon|Salomon & Co Ltd}} |