5. Corporate personality

A Company ◽

This chapter deals with the legal personality of a company which is separate from its members, capable of owning property, entering into contracts, and being a party to legal proceedings. It considers the case Salomon v A Salomon and Co Ltd [1897] AC 22, in which the courts affirmed separate corporate personality by rejecting attempts, on behalf of creditors, to impose liability for a failed company’s debts on its controlling shareholder. The consequences of separate corporate personality are also discussed, particularly with respect to a company’s human rights (or personal rights). In addition, the chapter examines the process known as ‘piercing the corporate veil’ in relation to the evasion principle; how an artificial entity can have legal personality; and a number of particularly significant court cases. Finally, it looks at corporate law theory and the issue of company linguistics.

5. Corporate personality

10.1093/he/9780198870029.003.0005 ◽

2021 ◽

pp. 98-142

Author(s):

Derek French

Keyword(s):

Human Rights ◽

Court Cases ◽

Controlling Shareholder ◽

Legal Personality ◽

Legal Proceedings ◽

Personal Rights ◽

House Of Lords ◽

A Company ◽

This chapter deals with the legal personality of a company which is separate from its members, capable of owning property, entering into contracts and being a party to legal proceedings. It considers the case Salomon v A Salomon and Co Ltd [1897] AC 22, in which the House of Lords affirmed separate corporate personality by rejecting attempts, on behalf of creditors, to impose liability for a failed company’s debts on its controlling shareholder. The consequences of separate corporate personality are also discussed, particularly with respect to a company’s human rights (or personal rights). In addition, the chapter examines the process known as ‘piercing the corporate veil’ in relation to the evasion principle; how an artificial entity can have legal personality; and a number of particularly significant court cases. Finally, it looks at corporate law theory and considers whether companies are grammatically singular or plural.

5. Corporate personality

Mayson, French & Ryan on Company Law ◽

10.1093/he/9780198841517.003.0005 ◽

2019 ◽

pp. 102-146

Author(s):

Derek French

Keyword(s):

Human Rights ◽

Court Cases ◽

Controlling Shareholder ◽

Legal Personality ◽

Legal Proceedings ◽

Personal Rights ◽

House Of Lords ◽

A Company ◽

This chapter deals with the legal personality of a company which is separate from its members, capable of owning property, entering into contracts and being a party to legal proceedings. It considers the case Salomon v A Salomon and Co Ltd [1897] AC 22, in which the House of Lords affirmed separate corporate personality by rejecting attempts, on behalf of creditors, to impose liability for a failed company’s debts on its controlling shareholder. The consequences of separate corporate personality are also discussed, particularly with respect to a company’s human rights (or personal rights). In addition, the chapter examines the process known as ‘piercing the corporate veil’ in relation to the evasion principle; how an artificial entity can have legal personality; and a number of particularly significant court cases. Finally, it looks at corporate law theory and considers whether companies are grammatically singular or plural.

5. Corporate personality

Mayson, French & Ryan on Company Law ◽

10.1093/he/9780198797234.003.0005 ◽

2017 ◽

Author(s):

Derek French

Keyword(s):

Human Rights ◽

Court Cases ◽

Controlling Shareholder ◽

Legal Personality ◽

Legal Proceedings ◽

Personal Rights ◽

House Of Lords ◽

A Company ◽

This chapter deals with the legal personality of a company which is separate from its members, capable of owning property, entering into contracts and being a party to legal proceedings. It considers the case Salomon v A Salomon and Co Ltd [1897] AC 22, in which the House of Lords affirmed separate corporate personality by rejecting attempts, on behalf of creditors, to impose liability for a failed company’s debts on its controlling shareholder. The consequences of separate corporate personality are also discussed, particularly with respect to a company’s human rights (or personal rights). In addition, the chapter examines the process known as ‘piercing the corporate veil’ in relation to the evasion principle; how an artificial entity can have legal personality; and a number of particularly significant court cases. Finally, it looks at corporate law theory and considers whether companies are grammatically singular or plural.

Directors’ Duties

Minority Shareholders ◽

10.1093/9780198820383.003.0001 ◽

2018 ◽

Author(s):

Victor Joffe QC ◽

David Drake ◽

Giles Richardson ◽

Daniel Lightman QC ◽

Timothy Collingwood

Keyword(s):

Common Law ◽

Corporate Law ◽

Legal Analysis ◽

Legal Personality ◽

Reasonable Care ◽

A Company ◽

Normative Role

The general duties imposed upon directors are the corollary of their powers; they spring from the directors’ functional and normative role in conducting the company’s affairs and affecting its legal relations. Corporate law and the constitution of the company repose in them powers to act, within certain bounds, in the company’s name. And in doing so, they necessarily affect all those interested in the company’s fortunes: most fundamentally, its members. The separate legal personality afforded to a company serves, for the purposes of legal analysis, as a nexus for its members’ interests, and makes it possible to describe directors in the exercise of their powers as agents for the company. These tenets explain the origin of some of the basic duties that apply to directors in relation to the exercise of their functions: to promote the interests of the company; to exercise reasonable care, skill, and diligence; not to exceed the limits of their powers; not to profit from their position; and not to place themselves in positions where their own interests or other duties conflict with their duties to the company. In doing so, they draw on equitable and common law principles of wider application, to agents, trustees, partners, and professionals.

Corporate Personality

10.1093/oso/9780198858874.003.0002 ◽

2021 ◽

pp. 37-47

Author(s):

Eva Micheler

Keyword(s):

Third Parties ◽

Company Law ◽

Organizational Boundaries ◽

Legal Personality ◽

Corporate Form ◽

Organizational Action ◽

To Come ◽

A Company ◽

This chapter discusses how separate legal personality can be explained as a solution developed by company law to address the problem that organizations are social rather than brute facts. For a company to come into existence, certain documents need to be registered. These contain information that facilitates the interaction between the company and third parties. Registration as a company then gives an organization a public legal manifestation. The Companies Act does not limit the corporate form to organizational action. The corporate form can therefore be used for other purposes and organizational boundaries do not align with legal personality. But this does not undermine the observation that company law is designed for the operation of organizations.

Responsibility before creditors in the corporate relations: tendencies and prospects of development of rules of law

Journal of Russian Law ◽

10.12737/4820 ◽

2014 ◽

Vol 2 (7) ◽

pp. 20-31

Author(s):

Олег Гутников ◽

Olyeg Gutnikov

Keyword(s):

Corporate Law ◽

Legal Person ◽

Separation Principle ◽

Legal Entity ◽

Legal Personality ◽

Legal Rules ◽

Applicable Law ◽

The Creation ◽

Domestic Law

This article is about the corporate disregard. Explicates the main principle of corporate law — separation of legal entity (separate legal personality) and separation of corporate property from person and property of participants of that corporation (separation principle). Author analyzed norms of the existing legislation, which are departing from this principle and allow cases to make the founders of a legal entity (or other persons having the ability to determine the actions of the legal entity) accountable for the obligations of that legal entity. Define the boundaries of application of the “piercing the corporate veil” doctrine, on the creation the legal rules on the liability to creditors of the legal person founders and other persons. The author concludes that the application of the “piercing the corporate veil” doctrine is possible only in case of corporate property deficiency during the creation or liquidation of juridical persons. Proposed to extend the relevant uniform rules on any legal entity. At the same time substantiates the thesis against use of the “piercing the corporate veil” doctrine during the existence of the legal entity as violating “the principle of separation”. The author writes about necessity exemption in applicable law cases of the “piercing the corporate veil” doctrine during the existence of the legal entity. Also attention turn to the vagueness of “reverse veil piercing” doctrine in the domestic law, when it concern the interests of the creditors-participating entity, in cases when it is possible to hold a legal entity accountable for the debts of its founders (participants) or the owner of the property.

Companies and the Constitutional ‘Right to Life’: A Critical Analysis of the Companies Act 71 of 2008

Mediterranean Journal of Social Sciences ◽

10.36941/mjss-2021-0061 ◽

2021 ◽

Vol 12 (6) ◽

pp. 107

Author(s):

Siphethile Phiri

Keyword(s):

Corporate Law ◽

Bill Of Rights ◽

Right To Life ◽

Legal Research ◽

Legal Personality ◽

Constitutional Right ◽

The Republic ◽

Novel Concept ◽

The Right ◽

A Company

Corporate law is founded on the fictitious principle of the separate legal personality of a company. This principle entails that a company is a juristic person, separate and distinct from any persons involved with the company. Because of their juristic nature, companies can acquire rights and incur liabilities in their own capacity. This corporate-law principle is rooted in section 8(4) of the Constitution of the Republic of South Africa, 1996 (hereafter the Constitution) which expressly provides the Bill of Rights applies to juristic persons subject to the stated considerations. The fact that companies as juristic persons, similar to natural persons, are entitled to the rights and freedoms contained in the Bill of Rights reveals that the Constitution recognises companies as ‘persons’. In this light, the article investigates how the Companies Act 71 of 2008 (hereafter the Companies Act) has embraced the constitutional right to life of companies as juristic persons as provided for in section 11 of the Constitution. To achieve this aim, the author applies the doctrinal legal research methodology – a legal research model which entails an examination of so-called ‘black-latter law’ with the Companies Act being the principal instrument. The results show that, although companies to do not enjoy the right to life in the same manner as natural persons, the literature examined reveals that the Companies Act recognises company’s constitutional right to ‘life’. In many instances, the right to continued existence of companies is promoted in various ways, including the introduction of the novel concept of business rescue by the Companies Act as a way of promoting the right to ‘life’ of companies. Received: 20 August 2021 / Accepted: 7 October 2021 / Published: 5 November 2021

Piercing the corporate veil in various jurisdictions – Principled or unprincipled?

Corporate Board role duties and composition ◽

10.22495/cbv16i2art4 ◽

2020 ◽

Vol 16 (2) ◽

pp. 47-53

Author(s):

Badar Mohammed Almeajel Alanazi

Keyword(s):

Limited Liability ◽

Developed Countries ◽

Court Cases ◽

Legal Rules ◽

The Us ◽

The Subject ◽

The Uk ◽

A Company ◽

Fair Balance

The principle of limited liability of a company has been uniformly adopted by developed countries. In order to ensure a fair balance, the courts agree on occasion to ‘pierce’ or ‘lift’ the corporate veil, which involves imposing liability on the mother company for actions of its subsidiary or individual shareholders, directors, and other involved persons for actions of the company. In this regard, there have been several studies arguing the legal issues associated with the limited liability of a company and piercing the corporate veil such as Schall (2016) and Michoud (2019). This paper compares current veil-piercing practices in three jurisdictions: the UK, the US, and Australia in order to outline the advantages and limitations of the approaches taken by the courts in each country as well as to identify best practices in terms of veil piercing. For that purpose, an analytical approach to the examination of the relevant legal rules, principles, and court cases has been adopted in undertaking the present paper. The paper comes up with a number of specific suggestions and recommendations for improving the regulatory role in regard to the subject of piercing of the corporate veil.

3. Corporate personality

10.1093/he/9780198848493.003.0003 ◽

2021 ◽

pp. 35-56

Author(s):

Brenda Hannigan

Keyword(s):

Fundamental Principle ◽

Company Law ◽

Legal Entity ◽

Legal Personality ◽

Corporate Groups ◽

House Of Lords ◽

Parent Companies ◽

Corporate Personality ◽

Do So

This chapter discusses the concept of corporate legal personality. This fundamental principle of company law—that the company on incorporation becomes a separate legal entity in its own right—was established by the House of Lords in Salomon v Salomon & Co Ltd. The Salomon principle and its consequences for individual companies and for groups of companies are considered. In limited circumstances, the court may disregard or pierce or lift the corporate veil and the narrow jurisdiction to do so is explained. The chapter also considers corporate groups in the light of Salomon, particularly with regard to the liability of parent companies for the actions of subsidiary companies.