Separate Legal Personality in UK Law

Leading Cases
  • Prest v Petrodel Resources Ltd
    • Supreme Court
    • 12 June 2013

    In my view, the principle that the court may be justified in piercing the corporate veil if a company's separate legal personality is being abused for the purpose of some relevant wrongdoing is well established in the authorities. It is also true that most cases in which the corporate veil was pierced could have been decided on other grounds. But the consensus that there are circumstances in which the court may pierce the corporate veil is impressive.

    The concealment principle is legally banal and does not involve piercing the corporate veil at all. It is that the court may disregard the corporate veil if there is a legal right against the person in control of it which exists independently of the company's involvement, and a company is interposed so that the separate legal personality of the company will defeat the right or frustrate its enforcement.

    These considerations reflect the broader principle that the corporate veil may be pierced only to prevent the abuse of corporate legal personality. It may be an abuse of the separate legal personality of a company to use it to evade the law or to frustrate its enforcement. It is not an abuse to cause a legal liability to be incurred by the company in the first place. It is not an abuse to rely upon the fact (if it is a fact) that a liability is not the controller's because it is the company's.

    I conclude that there is a limited principle of English law which applies when a person is under an existing legal obligation or liability or subject to an existing legal restriction which he deliberately evades or whose enforcement he deliberately frustrates by interposing a company under his control.

    I am not sure whether it is possible to classify all of the cases in which the courts have been or should be prepared to disregard the separate legal personality of a company neatly into cases of either concealment or evasion. But what the cases do have in common is that the separate legal personality is being disregarded in order to obtain a remedy against someone other than the company in respect of a liability which would otherwise be that of the company alone (if it existed at all).

  • Secretary of State for Trade & Industry v Goldberg
    • Chancery Division
    • 26 November 2003

    Central to the concept of limited liability is the concept that a company has a separate legal personality. A company retains its separate legal personality even if it is a member of a group of companies. Every director of a company, whether executive or non-executive, owes fiduciary duties to that company.

  • Standard Chartered Bank v Pakistan National Shipping Corporation and Others
    • House of Lords
    • 06 November 2002

    Both Sir Anthony Evans and Aldous LJ treated the Williams case [1998] 1 WLR 830 as being based upon the separate legal personality of a company. Aldous LJ referred ( [2000] Lloyd's Rep 218, 233) to Salomon v A Salomon & Co Ltd [1897] AC 22. But my noble and learned friend, Lord Steyn, made it clear (at p 835) that the decision had nothing to do with company law.

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Legislation
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Books & Journal Articles
  • The doctrine of piercing the corporate veil: Its legal and judicial recognition in Ethiopia
    • Nbr. 6-1, June 2012
    • Mizan Law Review
    • Endalew Lijalem Enyew
    • LL.B (Hawassa University), LL.M (Addis Ababa University)
    • 77-114
    Upon acquisition of legal personality a company enjoys certain attributes such as limited liability. While the separate legal personality of a company enables it to enjoy rights and assume obligati...
    ...... Endalew Lijalem Enyew ♣ . Upon acquisition of legal personality a company enjoys certain attributes such as limited liability. While the ... _____________ . Introduction . The separate legal personality of a company renders it a juridical person distinct from ......
  • Roderick I'Anson Banks, Lindley & Banks on Partnership
    • Nbr. , January 2019
    • Edinburgh Law Review
    • 148-150
    ...... noting that the Scottish partnership has separate legal personality, in contrast to English ......
  • Of ‘Landmark’ or ‘Leading’ Cases: Salomon's Challenge
    • Nbr. 41-4, December 2014
    • Journal of Law and Society
    This article seeks to question the two dominant conceptions of ‘landmark’ or ‘leading’ cases in English legal scholarship, using the House of Lords decision in Salomon v. Salomon Co Ltd. – the most...
    ......:1px 1px 3px 1px #333;border-collapse:separate;}.pc.opened{-webkit-animation:fadein ... land- mark' or ` leading' cases in English legal scholarship, using the House of Lords decision in ...Rickett (eds.), Corporate Personality in the 20th Century (1998). 11 See, for ......
  • Alastair Hudson, Understanding Company Law
    • Nbr. , January 2018
    • Edinburgh Law Review
    • 166-167
    ...... law territory, such as the nature and legal structures of modern companies, the rights of ... that there should be exceptions to separate legal personality and limited liability of ......
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Law Firm Commentaries
  • Piercing the Corporate Veil – the Supreme Court Rules Again
    • JD Supra United Kingdom
    In Prest v. Petrodel Resources Ltd the Supreme Court confirmed that the separate legal personality of a company cannot be disregarded unless the company is being abused for a purpose that is in som...
    ...... the Supreme Court confirmed that the separate legal personality of a company cannot be ......
  • Staggered Lifting of the Corporate Veil: A Case for Group Insolvency Norms
    • LexBlog United Kingdom
    The recognition of a company’s separate juristic personality by the UK’s House of Lords in its landmark ruling in Salomon v. Salomon A Company Ltd.,[1] remains the basis for modern corporate law.[2...
    ... The recognition of a company’s separate juristic personality by the UK’s House of Lords ... in effect drew a corporate veil around the legal personality of the company thereby establishing ......
  • TRANSACTIONAL: Corporate/London: Looking Around the Corporate Veil by Hywel Jones
    • JD Supra United Kingdom
    International energy agreements frequently incorporate UK law in choice-of-law clauses. Legal principles developed by British courts thus have the potential to affect wide-ranging operations of ene...
    ......Legal principles developed by British courts thus have ... benefit from the legal principle of “separate corporate personality” meaning that the acts ......
  • Piercing The Corporate Veil: Supreme Court Clarifies The English Law Position
    • Mondaq United Kingdom
    ...... law permits a claimant to ignore the separate legal identity of a company, and "pierce the ... the companies had a separate legal personality from Mr Prest, as they were not being used for an ......
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