11/27/2022 0 Comments Legal standing meaning![]() Each corporation is a separate legal entity in the eyes of the law. I am having to educate my client and his attorney on the idea that the plaintiff must have standing to pursue this claim. The majority shareholder who is my contact and his foreign-based lawyer keep reminding me that ‘corporation x controls corporation y’ and ‘I own that corporation’. Moreover, the plaintiff is suing the defendant over the debt outlined in their contract, but, of course, that debt was owed by a third party corporation to numerous other corporations that are not parties to the contract. The plaintiff/petitioner corporation is not a signator to the original contract but is ‘controlled’ by the same individual shareholder. The defendant/respondent corporation has entered into a contract purporting to obligate another corporation to a debt to numerous other corporations (which are not parties to the contract). The parties use the names of the various corporations interchangeably in their contracts. In this case the defendant corporation ‘controls’ numerous other corporations which own other corporations. I am currently involved in an international business arbitration between two foreign corporations. While there is an exception to this general rule when a party is able to ‘pierce the corporate veil’ through alter ego, the general rule is the more common situation. It must enter into contracts in its own name and it must sue or be sued in its own name. Each corporation is a separate legal entity. In corporate litigation the confusion often arises when an individual or corporate shareholder does not respect the separateness of the corporation in which they own shares. In corporate litigation I often see confusion as to this issue, even among attorneys. “Standing” is a legal term of art which refers to a party’s right to sue or be sued. Business litigation lawyers are often asked to evaluate the legal standing of a party to a lawsuit. ![]()
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