Generally, the Nigerian courts will treat the parent company as a separate entity from its subsidiaries. Nevertheless, the Court will be justified to pierce the corporate veil of the parent company and hold it liable for the acts of subsidiaries under the following circumstances;
(a) Fraud
The Courts may pierce the corporate veil of the parent company to hold it liable for the debts of its subsidiaries if there is fraudulent trading; or the subsidiaries is managed by the parent company recklessly with intent to defraud; or the parent company is using the subsidiaries as a vehicle for fraud.
(b) Place of Business
The veil of subsidiary companies may be lifted to ascertain whether their foreign parent company has a place of business in Nigeria or not.
(c) Agency
If subsidiary companies act as the agent of their parent company, the parent company may be held liable as the principal of the subsidiary.
(d) Contract
The parent company may by contract make itself liable for the acts of its subsidiaries. This may also be inferred from the relationship and operations of the parent or its subsidiaries.
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