Comparison with Venezuelan and Danish Law

VENEZUELAN LAW

Under Venezuelan law, all corporation-like entities must meet all the requirements for the formation to be valid. Should they not comply, the entity is deemed to be inexistent.

Therefore, the entity cannot act at all, and the shareholders are personally liable for all actions they make which can be under the corporation’s identity.

At the moment of registry, the corporation’s bylaws are required to be submitted for approval by the registry’s office.

If a corporation does not meet the requirements needed for formation, the registry’s office can deny its registry. Making it impossible for a de facto corporation to exist. Because a de facto corporation may not exist, the estoppel doctrine can never be applied.

As for the corporate veil, this has been a new concept being introduced mainly by labor and tax courts, where fraudulent activities may be involved. There is however, no statute actually permitting the “piercing of the corporate veil”.

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DANISH LAW

Types of corporation

Under Danish Law the concepts of de facto corporation and estoppel (in connection with corporations) do not exist. If you do not comply with the statutory requirements (e.g. registration with the Danish Companies and Commerce Agency - see link), your entity does not constitute a corporation.

Piercing the corporate veil

Under Danish Law the concept of disregarding the limited liability (piercing the corporate veil) does exist.

However, the application of the concept is extremely rare. In fact, until a Supreme Court judgment from 1997 it was unclear whether the concept was actually applicable under Danish Law.

Instead, it is possible to sue board members, shareholders, etc. for damages they may have caused by negligent or fraudulent actions/omissions.