ABSTRACT
The principle established in the UK House of Lords’ case of Salomon v Salomon [1897] AC 22 is universally known as the concept of Corporate Legal Personality whose implications include that the liability of members of a company is limited to the amount of their unpaid shares. While the principle is placed on a broad foundation, useful and convenient, it ought to, like many other rules, be received with some qualifications, especially in view of the fact that it has sometimes be relied upon to defraud creditors, to evade existing obligations, to circumvent statutes, or to protect knavery or crime. Occasional piercing of the veil of incorporation is thus considered both desirable and necessary with a view to ensuring that it is not used successfully for such negative ends. This paper discusses the concept established in Salomon v Salomon, its implications and continued usefulness in the light of the negative ends to which the concept is sometimes deployed. This writer’s suggestion that the concept remains indispensable for the overall preservation of the sanctity of the corporate world, is followed by a dispassionate discussion of current case law on Corporate Legal Personality and Lifting of Corporate Veil. Then follow a brief analysis of the circumstances that may justify lifting of the veil, and the writer’s conclusion.
Sylvester Udemezue, Does Salomon v Salomon Still Reign? A Disquisition on Recent Case Law on Corporate Legal Personality and Lifting the Veil (November 15, 2020).
First posted 2021-03-19 16:00:16
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