In Zubrowka, the courts have no authority to question the existence of a registered company assuming that NZ follows a similar rule. Response This statement is incorrect as unlike in Zubrowka, in NZ, the existence of a company can be challenged in courts. Even though once a company is registered it becomes a separate legal entity with its own rights and liabilities , as established in Salomon v A Salomon & Co Ltd case, there is instances in NZ where a company's existence can be challenged in court even after its registration, through: Piercing the corporate veil: This allows courts to ignore the company's separate legal personality if it's used for fraud or improper purposes. Directors' personal liability: Some directors duties include exercising power appropriately , avoid reckless trading and not misusing companies information . Breaching these duties leads to 5 years imprisonment or $5,000 in fines Fraudulent or Wrongful Trading: Directors can be liable for debts if trading occurs during insolvency. shorten