Comment on “Verkkokauppa.com”

Abstract

A Finnish limited liability company had carried out its business activities partly through an Estonian limited liability company and evaded, as a result, the payment of private copying levies charged in Finland. Taking into consideration the relations of ownership and control between the two companies, the central ground and purpose for organising business activities in this form was to be regarded as the evasion of a statutory obligation. The Supreme Court of Finland found the practice of the Finnish company reprehensible to such a degree that it was justified to pierce the corporate veil and set aside the separateness of the Estonian company provided in limited liability company legislation, holding the former liable for compensation concerning the unpaid private copying levies vis-à-vis the plaintiff. This case note analyses the criteria set out by the Supreme Court for setting aside the guiding principle of separate assets and liabilities under limited liability company law if the form of a limited liability company has been abused.