Lifting the Veil
Veil Lifting
QUESTION
The general reasoning of the Court in this area of Veil Lifting the Corporate veil has been confusing and, at times, contradictory:
Discuss
The question requires an analysis of whether the parent company (A); will be liable for the claims against its subsidiary, (b): in other words, whether the corporate veil can be lifted in this group structure.
Both the parent company and its subsidiary are incorporate which have been legally formed. A company once incorporated, is a separate, and distinct legal entirely from the people who set it up:
The Veil of incorporation is created by the principle of separate legal personality and that limited liability which are established in Salomon v Salomon & Co Ltd (1897)
A company, once incorporated is a separate and distinct from the people who set it up. In a company limited by shares, a member’s liability for the company debts is limited to his subscribed shares.
The courts are very protective of the Salomon principle and only lift the Veil in a small number of exceptional cases at common law and by statute. As there are no clear rules or guidelines for lifting the corporate veil, it is correct argued that this area of law is confusing, contradiction and difficult to rationalize.
Example: in Solomon v Solomon& Co Ltd (1897):
In a company limited by shares, a shareholder is not liable for the company’s debts. As (A) hold shares in (b) , it enjoys the protection of limited liability in respect of debts of (b), if the corporate veil could be lifted and the separate legal personality of (b) be ignored, (a) would be liable for claims against (b).
The court may lift the corporate veil if the corporate group structure is used as the: example in Adam v Cape Industries plc [1990]
Cape Industries plc (cape) was an English mining company and its products were marketed through its subsidiary companies in the United State. A number of workers suffered from inhaling asbestos. The question can Cape mother
QUESTION
The general reasoning of the Court in this area of Veil Lifting the Corporate veil has been confusing and, at times, contradictory:
Discuss
The question requires an analysis of whether the parent company (A); will be liable for the claims against its subsidiary, (b): in other words, whether the corporate veil can be lifted in this group structure.
Both the parent company and its subsidiary are incorporate which have been legally formed. A company once incorporated, is a separate, and distinct legal entirely from the people who set it up:
The Veil of incorporation is created by the principle of separate legal personality and that limited liability which are established in Salomon v Salomon & Co Ltd (1897)
A company, once incorporated is a separate and distinct from the people who set it up. In a company limited by shares, a member’s liability for the company debts is limited to his subscribed shares.
The courts are very protective of the Salomon principle and only lift the Veil in a small number of exceptional cases at common law and by statute. As there are no clear rules or guidelines for lifting the corporate veil, it is correct argued that this area of law is confusing, contradiction and difficult to rationalize.
Example: in Solomon v Solomon& Co Ltd (1897):
In a company limited by shares, a shareholder is not liable for the company’s debts. As (A) hold shares in (b) , it enjoys the protection of limited liability in respect of debts of (b), if the corporate veil could be lifted and the separate legal personality of (b) be ignored, (a) would be liable for claims against (b).
The court may lift the corporate veil if the corporate group structure is used as the: example in Adam v Cape Industries plc [1990]
Cape Industries plc (cape) was an English mining company and its products were marketed through its subsidiary companies in the United State. A number of workers suffered from inhaling asbestos. The question can Cape mother