Business Law
All corporations have a duty to act as moral agents since they are endowed by the state a distinct personality that is separate from its incorporators. As such, they are to be considered as morally responsible agents for being created as legal persons under the corporation law. Being a legal entity, they have the power to sue and be sued. They have the ability to pool together their wealth and income to engage in economic activities as one body. Such activities cannot be done if the members of the do this on their own individual capacities. In effect, the corporation’s directors are given the power to represent the corporation in all their dealings, given the express authority. Hence, being representatives of the corporation, they have the duty to become moral agents by acting in good faith, observing justice and fairness in all their dealings. Such being the case, the directors are the agents, and the principal is the corporation. The directors, being the agents of corporation are impressed with the fiduciary obligation to put place the interests of the corporation as their top priority. Corporations are powerful entities in the business world since they engage in various economic activities which allow them to generate income. However, there are corporations who act in bad faith by choosing to breach contracts or engage in fraudulent activities to earn profit. The acts of the agents of the corporations reflect the personality of the people working behind the corporation. It is at this time that the law allows that the corporate veil be pierced when the corporation is used to perpetrate crimes and fraud to the detriment of other people. When a corporation causes harm to others, this is the time when the individual directors of the corporation can be held liable for the tortuous acts of the corporation.
