A registered company is a legal person distinct from its members. That single idea — Salomon v A Salomon & Co Ltd [1897] AC 22 — is the foundation of company law. Limited liability is a consequence of personality plus the limited-share contract, not a mood. Most of your company paper is an application of Salomon, or an argument about when it yields.
Company Law · Lecture notes
Salomon and the Corporate Veil
Separate legal personality, limited liability, and the narrow grounds on which courts will look through the company.
Hornbook Faculty4 min read0 reads
When the veil is lifted
Courts are slow. Typical clusters: (1) statute requires it (fraudulent and wrongful trading, personal liability of directors); (2) the company is a façade concealing the true facts (fraud, sham); (3) agency is genuinely proved on the facts, which is rare; (4) groups of companies in particular tort and EU contexts, which you should treat as exceptional rather than a general ‘group enterprise’ doctrine. Prest v Petrodel (2013) restated that there is no roving jurisdiction to do justice by ignoring the company.
What to do in a problem
- Identify who is suing whom — company, director, shareholder, creditor.
- State Salomon as the starting rule.
- Ask whether a specific statutory route to personal liability exists.
- Only then consider façade / concealment.
- Separate this from directors’ duties, which bite on the director without ‘lifting’ anything.