Question: In what circumstances is the judiciary prepared to relax the doctrine of the separate legal personality of a company? Is the current legal situation satisfactory from a policy point of view, particularly in the light of the group structure of many modern businesses?
Answer: An incorporated company is regarded by the law as a distinct and separate legal entity from its members - a principle established by the case Salomon v Salomon . It follows that the any liabilities held by company are owed only by the company – and not by its members. For this reason Salomon can also be considered “the starting point for each court when considering the question of whether the corporate veil should be lifted.” It has been emphasized that “the courts can, and often do, pull off the mask\" and are willing to “look to see what really lies behind” under certain circumstances. What was established in Salomon - though concerned at the time primarily with single entities - has successfully made the transfer to a context involving groups of companies.......(short extract)
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Details: - Mark: 70% | Course: Commercial Law | Year: 2nd/3rd | Words: 2499 | References: Yes | Date written: November, 2007 | Date submitted: April 20, 2009 | Coursework ID: 484
