Corporate Personality
Module Title: Company Law
Company Law Assignment – Question A
In this assignment, I will identify the theory of a corporate personality, demonstrate why companies exist autonomously from their promoters or owners, introduce the concept of a company having a corporate veil, and finally to identify why there is such controversy around the notion of a court lifting the corporate veil, with a focus on ‘sham’ companies.
The theory of a company having a separate legal personality comes from the introduction of incorporation. Incorporation of a company is established when the company submits all of the relevant documents to the registrar, which, if approved; will result in the issue of an incorporation certificate, acting as conclusive evidence of its incorporation.
The requirement for a company to have a separate legal entity is forever scrutinized by certain legal professionals, however this is an essential factor to ensure all of the legal liability a company can create is not directly connected to its members or shareholders. As a result, companies can own property, employ people to work in a desired role, incur their own debts and initiate contracts. Incorporated companies exist independently autonomous from its original promoters and the people who are in directorship.
The independent legal status associated with incorporated companies is said to have created the idea of casting a veil between the company and its’ members/owners/share holders, which is known amongst the legal profession as the corporate veil. As a result, this has caused various arguments against whether this separation should exist and if the so called corporate veil should be permanently lifted or just lifted at the courts discretion.
The function of preventing all legal liability falling on its’ owners/members was a required characteristic and the fundamental reason why Parliament wanted to find a way of rectifying the problem and stop owners/members being subject to high amounts of
Company Law Assignment – Question A
In this assignment, I will identify the theory of a corporate personality, demonstrate why companies exist autonomously from their promoters or owners, introduce the concept of a company having a corporate veil, and finally to identify why there is such controversy around the notion of a court lifting the corporate veil, with a focus on ‘sham’ companies.
The theory of a company having a separate legal personality comes from the introduction of incorporation. Incorporation of a company is established when the company submits all of the relevant documents to the registrar, which, if approved; will result in the issue of an incorporation certificate, acting as conclusive evidence of its incorporation.
The requirement for a company to have a separate legal entity is forever scrutinized by certain legal professionals, however this is an essential factor to ensure all of the legal liability a company can create is not directly connected to its members or shareholders. As a result, companies can own property, employ people to work in a desired role, incur their own debts and initiate contracts. Incorporated companies exist independently autonomous from its original promoters and the people who are in directorship.
The independent legal status associated with incorporated companies is said to have created the idea of casting a veil between the company and its’ members/owners/share holders, which is known amongst the legal profession as the corporate veil. As a result, this has caused various arguments against whether this separation should exist and if the so called corporate veil should be permanently lifted or just lifted at the courts discretion.
The function of preventing all legal liability falling on its’ owners/members was a required characteristic and the fundamental reason why Parliament wanted to find a way of rectifying the problem and stop owners/members being subject to high amounts of
Bibliography: 2010 Google, ‘Google Scholar’, <www.scholar.google.co.uk>, Accessed 12 November 2010 Lisa Linklater, 2006, “Piercing the corporate veil” – The never ending story?, Editorial Journal Article, Company Lawyer, Available at: <Comp [ 13 ]. Smith, Stone & Knight Ltd v Birmingham Corporation (1939) 4 All ER 116 [ 14 ]