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Inside Internal Controls

News and discussion on implementing risk management

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Canadian Dredge test

The corporate identification doctrine clarified through an intervention in the Supreme Court of Canada

A corporation is of course an abstract entity. It is a legal person, but can only act through human beings. Certain causes of action, such as fraud or knowing assistance of a breach of trust, have a knowledge requirement: the defendant can only be held liable if he or she – or it, in the case of a corporation – has knowledge of certain facts. How can a corporation be held liable for having certain knowledge if it has no brain to possess that knowledge?

 

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