Introduction Bob is a former director of both BJDML(‘B’) and Fence Ltd (‘F’), a subsidiary of BJDML. Prior to Bob’s resignation, he contractually granted B a license to all patents to manufacture “electrosafe” in exchange for royalty payment based on gross sale revenues of BJDML in 2010. David, the current managing director of both B and F, ceased payment to Bob in early 2013. Threatened by legal action, David offered Bob full payment of royalties based on sales revenue generated by BDML. However, Bob would like to pursue F to obtain royalties which include calculations of gross sales revenue of F as he argues that he is entitled to higher payment due to him as inventor. The legal issue is whether F and B can be treated as one, thus validating the inclusion of revenues of F in the calculation of Bob’s royalty payments. Tom (Bob’s consultant) suggests that Bob has strong case due to the significant degree of overlap between B and F. Thus, in order to determine the likelihood of success in this litigation, it is imperative to examine principles in the Corporation Act 2001. In particular, F’s status as a separate legal entity and the possibility of “piercing” the corporate veil will be analysed.   Separate Legal Entity It is paramount to determine whether B and F are separate legal entities. According to Salomon’s case , “companies that are duly incorporated cannot be deprived of its separate legal personality.” This means that the presumption that a corporation is a separate legal entity, entirely distinct from its officers, directors, shareholders and affiliations holds for all incorporations. Similarly, this principle would apply for corporate groups. This preposition is enforced in Walker v Wimborne, where it was held that debt incurred by each entity in a corporate group is absolutely separate. Furthermore, the fact that B exerts high level of dominance over F does not change the fact that they are both distinctly separate. Thus, unless the corporate veil is pierced, Bob would not succeed in his case.