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Piercing the corporate veil or lifting the corporate veil is a legal decision to treat the rights or duties of a corporation as the rights or liabilities of its shareholders. Usually a corporation is treated as a separate legal person , which is solely responsible for the debts it incurs and the sole beneficiary of the credit it is owed.
Lifting the veil Jones v Lipman [1962] 1 WLR 832 is a UK company law case concerning piercing the corporate veil . It exemplifies the principal case in which the veil will be lifted, that is, when a company is used as a "mere facade" concealing the "true facts", which essentially means it is formed to avoid a pre-existing obligation.
To reach this conclusion the Court examined the requirements to "lift the veil". Wilson J. explained: The law on when a court may disregard this principle by "lifting the corporate veil" and regarding the company as a mere "agent" or a "puppet" of its controlling shareholder or a parent corporation follows no consistent principle.
It has often been supposed to cast a veil over the personality of a limited company through which the courts cannot see. But that is not true. The courts can and often do draw aside the veil. They can, and often do, pull off the mask. They look to see what really lies behind. The legislature has shown the way with group accounts and the rest.
Prest v Petrodel Resources Ltd [2013] UKSC 34, [2013] 2 AC 415 is a leading UK company law decision of the UK Supreme Court concerning the nature of the doctrine of piercing the corporate veil, resulting trusts and equitable proprietary remedies in the context of English family law.
Fraud, lifting the veil Gilford Motor Co Ltd v Horne [1933] Ch 935 is a UK company law case concerning lifting the corporate veil . It gives an example of when courts will treat shareholders and a company as one, in a situation where a company is used as an instrument of fraud.
The grounds for the decision were (1) that since D.H.N. was in a position to control its subsidiaries in every respect, it was proper to pierce the corporate veil and treat the group as a single economic entity for the purpose of awarding compensation for disturbance; (2) that if the companies were to be treated as separate entities, there was ...
Walkovszky v. Carlton, 223 N.E.2d 6 (N.Y. 1966), [1] is a United States corporate law decision on the conditions under which Courts may pierce the corporate veil. A cab company had shielded itself from liability by incorporating each cab as its own corporation. The New York Court of Appeals refused to pierce the veil on account of ...